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Randoms: Navigating Freaky Friday


Sad Sack makes a comeback.


Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also Darkness Before the Dawn.

The Final Fifth - 9:13 am

Seriously, affix your suspenders, grab some flair and toss on that red and white shirt--it's here, it's Friday. TGIF!

The following vibes are top-of-mind as we suck it up and dig deep:

  • The bull in me wanted to see a horrific jobs number--perhaps an outlier of seven-figure size--as moves of this magnitude typically end with a bang.

  • I enter this session with a chunk of FAS ($3-ish cost basis) and General Electric (GE) calls, a bullish skew for sure but digestible in terms of size with lotsa dry powder should we see some Steely Dan.

  • Minyan Franklin asks, "If you get hit on your S&P 600 bid, are you putting that away or flipping it if we see a sharp reflex rally." I told him it's my long-term bucket and my intent is to hold it but the markets are multi-linear and I will adapt in kind (a lot depends on the dollar). He suggested I share that with ye faithful so, well, there it is.

  • A good friend of mine just called, a bit panicky, and said, "I told my financial adviser last year that I wanted to be more defensive--which to him was 65% exposure to stocks. Now, I feel like I'm in the Ostrich Position. What should I do?"

  • My response to him (other than "you need a new financial adviser") was that he needs to have a healthy balance. "If you're choking on exposure, make some sales and get within your comfort zone." While I provided the context that I'm a better buyer into S&P 600, I made no assurance that that was "right."

  • Good luck today, Minyans--and have a MUR-fect day!

Gate Sniffage - 9:45 am

  • American Express (AXP) was the only financial to open with pink eye in an otherwise green hue.

  • There's an old adage somewhere that speaks about Fridays being up days in bear markets (and down days in bull markets). While I hear that Adage CDS are blowing out too (is nothing safe?), I wanted to pass it along.

  • We're gonna see a probe lower, Doc--that much seems intuitive--but if Hoofy can't hold the fort thereafter, you'll start hearing all sorts of 1987 analogs. See it, even before you hear it.

  • Note the action in the master betas--Amazon (AMZN), Google (GOOG), Research in Motion (RIMM), Apple (AAPL) and Baidu (BIDU)--as they flip an early crimson switch.

  • I've taken a stab in this FAS (cost basis $3-ish) but I'm not gonna build it into a monster position. Why? I don't trust ultra-ETF's and I've learned from the lesson that was the DXO. This is a pure "kick save" play, and one I don't plan to have on for more than a week, if that.

Dollah Atcha Boyz, Yo! - 10:14 am

Keep an eye on the greenback, which is slinking near session lows (DXY -1.15%). As we often say in the 'Ville, a lower dollar is a necessary precursor--but no guarantor of--higher asset classes. It's that whole Wishbone World thang, you know.

In equity land, the overhang of supply has shifted into probe mode, a spittin' image of my sister's spleen. Keep close tabs on the tenor (market breadth (still 3:2), the financials (BKX +3%) and beta (heavy, Betty) for clues of a refuse.

And please, Minyans, think for yourself and don't believe the hype. The last thing you wanna do is spend our precious requisite respite lamented risk gone awry.

Chatta Box! - 10:42 am

We dont "do" rumors in the 'Ville but please be advised that (thus far unconfirmed) stories are circulating that Cisco (CSCO) is scaling back orders, which is hitting all of tech.

The New York Sack Exchange! - 11:30 am

  • This could well turn into a "be careful for what you wish" but we knew a probe was coming and the sooner it happened, the better. Now, we have to listen closely for Steely Dan given how fragile current psychology is.

  • What have I done today? Not much, although I sold a snivlet of my FAS position (near my cost basis) to respect the process in front of the (perceived) probage. I'm still there (always honest), as I am in General Electric (GE) (didn't make a sale into the early strength).

  • I'm not opposed to nibbling on some SPY (S's over N's) and any exposure will have tight, trailing stops. And yes, the closer we get to S&P 600, the more bullish I'll become.

  • Dry eyes? The consumer non-durables (Coca-Cola (KO), Pepsi (PEP), McDonald's (MCD)), energy (BHP Billiton (BHP), Halliburton (HAL)) and select pharma (Abbott Labs (ABT), Merck (MRK)).

  • Sad sacks? Mostly four-letter freaks (high beta), retail (Wal-Mart (WMT), Target (TGT)) and that dude from Harvey Comics.

  • HEY! Has anyone ever seen Sad Sack and Alan Greenspan in the same room at the same time?

  • We strive to respectfully see both sides in the 'Ville. As such, I will share that one of my mantras when running big money was that when I couldn't find single stocks to buy, I didn't buy an index (other than pure, quick trades). For when it comes to investing, it's a market of stocks, not a stock market.

  • What would Freaky Friday be without a crazy afternoon schedule? My conference call cuddle starts at 1:30 and then I'm outie for a crosstown mindmeld at 2:45 pm. But of course I am, right?

  • Coming next week to Minyanville - OptionSmith by Steve Smith - an excellent options newsletter written by smart cookie, Steve Smith. Check it out and start your trial day 1.

  • Congrats to Minyan Charlie Poe on completing "Life is a Playground." Way to hum, yo.

  • As always, I hope this finds you well.


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Position in GE, FAS, SPY
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