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Random Thoughts: Will Ambac and MBIA Stay Green?


If ABK and MBI are gonna turn the tide, we would likely see it manifest in the homie space.


Editor's Note: This content was conjured by Toddo this morning in real time. It is being reposted here for the benefit of the Minyanville community.

Gate Sniffage! - 9:51 am

  • So I'm walking through the gym this morning after my kick-boxing session and saw a graphic on TV stating that the S&P and DJIA are off roughly 5% this year.

  • My first thought was "Jeezums, we've seen a perfect 50% retracement off the lows--right into resistance--why don't I have more short exposure, especially since I had this thought yesterday?"

  • BREAKING NEWS! Banks are tightening lending standards. Shocker, Fokker--does this really surprise anyone?

  • As go the piggies (BKX -2%, XBD -2.7%), so goes the yoke.

  • Green seeds in the Red Sea? The homies, homie, as well as Broadcom (BRCM), Applied Materials (AMAT), Ambac (ABK) and News Corp. (NWS).

  • Why do we always look for stocks pointed "the other way" on gap openings? It's not because we're being difficult, it's because it often unmasks supply-demand agendas.

  • Citigroup (C) $30, until proven otherwise, is a level to lean against for Boo and his crew.

  • Bar Mitzvah what? Eli Manning morphed from a boy to a man this post-season. I'll be honest, I didn't think he had it in him. I was wrong and I'm happy I was.

  • A'ight--I'll be back. Give Bonnie a kiss and have a fantastic fete.

These eyes have seen alotta love but they're never gonna see another woman like I had in you... - 10:21 am

  • Toss Google (GOOG), Apple (AAPL) and Under Armour (UA) on the "hmm... they act well in the face of fugly futures" bucket. I saw it earlier and thought I Buzzed it but alas, the A.D.D. beat me to it.

  • The homies also continue their relative strength but I don't have a horse in that race anymore. Hey, what's 20% in a week amongst friends?

  • If past support is future resistance, does Toddo 200 lbs now become a ceiling?

  • Levels to watch the udder way? Right here in the S&P (recent uptrend) and right there for the piggies (BKX 88ish), if and when.

  • Gimme that Greenback! Watch the buck shuck the fears and pin our ears. That's big picture bearish, through my "asset class deflation vs. dollar devaluation" lens, and sloppy commodity action is an additional equity warning flare.

  • Trade, don't chase.

  • We all need a Reed Rothchild in our life, eh?

Diggy Diggy Diggy Diggy (Shaddup!) - 11:06 am

Fellow Minyan Ken "Who's your Caddy" Klaiman just pinged to sing "You've got the touch. You've got the power." Hey brother, two things. One, sorry about your Pats--the tuck swings both ways--and two, I think the base is taking away from the vocals!

His response? He changed the subject, naturally, offering that Ambac (ABK) and MBIA (MBI) are both giggling green. They've been a good tell of late, we know, so it's worthy of a mention as we keep an eye out for Bonnie "Roller Girl" Tyler.

While the banks cant find a bid and breadth is 3:1 to the bad, we strive to see both sides of any market ride. Along those lines, it's worth noting the following seeds of hope on an otherwise dreary Tuesday:

  • Combined NYSE and NASDAQ volume during yesterday's decline was 30% slower than Friday. And yes, I'm happy that I didn't mention that into yesterday's close.

  • If ABK and MBI are gonna turn the tide, we would likely see it manifest in the homie space. That's thus far happened, as we spied on the opening, and the group hasn't looked back since.

  • Google (GOOG). Apple (AAPL). Under Armour (UA).

Uh, um, hmm...yeah. That's about it from where I sit, as there are more reasons to be cautious than optimistic right here, right now and subject to change. I can't help but wonder if we'll look back and say "Jeezums, S&P 1496 was 'close enough' to 1405 to warrant a harsher fade."

It's always that way, though. We'll never buy enough at the lows (remember how scary S&P 1275 was?) and we'll never sell enough into rallies. The sooner we come to grips with that reality, the quicker Jack Horner will get out of the corner.

As always, I hope this finds you well.



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