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Random Thoughts: Just Another Manic Monday


Repositioning risk into the market rally.


Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also The World's Wildest Reality Show.

Gate Sniffage! - 9:42 am

  • Remember Minyans, expiration hangovers typically take a few hours to abate before a more (cough) normalized trading dynamic returns.

  • The time stamp on my bull costume appendages (two legs, 50% conviction) was S&P 785, NDX 1065 and DJIA 7820.

  • I'm still there (although I've made a round of sales into this morning's lift) and while year-end surprises could manifest on the upside, I'm gonna set a "stop" on that metaphorical imagery on the other side of S&P 780, if and when (particularly since I'll be out Friday for the holiday).

  • My Citigroup Infinity Zero calls for $3.75? I slapped a fitty-cent trailing stop on the entire position when it opened north of $6. Just trading, and doing so with all due humility.

  • Watch the dollar Yo. It's off a deuce (2%) and while that's no guarantor of an asset class rally, it's a necessary precursor for the tape to sustain a bid.

  • I pared my Google (GOOG) position in half into the opening pop (no hiding here, it's been a dog) with an eye towards getting back into Research in Motion (RIMM) as my master beta year-end play.

  • Syracuse. Raiders. Broncos. There is a football God.

  • Lemme get this out thar, Minyans, as always, I hope this finds you with the right mind and a good head as we fire up our freaky week.

Bangles & Jangles - 10:32 am

It's just another Manic Monday as stocks meander higher and bulls play with fire. I'll tell ya, while I'm (thus far) on the right side of this ride, the nub nibblin' continues as I watch the tenuous tape tickle higher. Some top-line vibes as I scan the land and offer a hand.

  • It's a Todd-lot size call position but I did dip a toe back into Research in Motion (RIMM) when it pressed lower (up fitty cent on the day). I've still got half my (under water) Google (GOOG) position to tend with but one trade at a time as we fit together these trippy pieces.

  • The single most bullish thing on my eight screens? No, not the 5:1 market internals. Nay the seven percent lift in the BKX (banks) and XBD (brokers). It's the 2.5% drop by the dollar, which is necessary should this reverse bleed pick up speed.

  • Why is that important? The other side of hedge fund redemptions is mutual fund performance anxiety. IF--and yes, that's a monster IF--the tape can sustain a bid and, perhaps more importantly, retake S&P 840, alotta cash-laden money managers are gonna find themselves under-performing their benchmark.

  • What have I done today? I was stopped out of Citigroup (C) (nice schnitzel and no looking back), sold a token amount of Goldman (GS), sliced the Google calls in half, added the aforementioned starter position in RIMM.

  • At a point, I'll likely start paring some energy exposure but as long as the dollar drips, I wanna exercise some patience. Hey, I'll take my exercise where I can get it these days.

  • Heads up, Minyans, I'm gonna take one leg out of the bull costume (leaving one leg, or 25% conviction) here as we test S&P 840. 7% in three sessions (after feeling like I was dead wrong) begs a disciplined process.

  • What else am I doing? Checking the Festivus list twice, for we're a few registrations away from hanging a SOLD OUT sign on the door for next Thursday's holiday soiree. Something tells me this year is gonna be a humdinga!

  • As always, Minyans, I hope this finds you well.

Answers I Really Wanna Know... - 11:53 am

  • Was the rally to (former support and current resistance at) S&P 840 the "easy trade"?

  • Have we turned an important psychological corner (from fear of missing to fear of losing) or is this simply a retracement rally that begs to be sold?

  • When in doubt, sit it out or trade a little "in between?"

  • Was that effectively communicated when I removed one of my legs from the metaphorical bull costume after catching 7% in a matter of days (leaving one leg (or 25% upside conviction)?

  • What in the wide world of sports is ailing Google (GOOG)?

  • Rather than lamenting my long, I suppose I should be grateful for selling half my position into the opening spike higher and rotating that risk into Research in Motion (RIMM), which has better flavah flav?

  • Would now be a good time to share that I "took my trade" in Goldman Sachs (GS), effectively rotating my risk away from the financial complex?

  • While I was introduced as "an economist from the Wall Street Journal" yesterday on television (egads!!!), I suppose the timing of the content couldn't have been better?

  • Have you sold enough at S&P 840 such that you won't look back if we fail and flail?

  • Have I?


Did you know the doors to Festivus 2008 are officially open? Have you yet locked your spot for the critter trot as last year's soiree sold out? (This is our annual event to commingle our professors, partners and Minyans while chowing down and listening to live music. The very best part? It's for the kids in the good name of my grandfather.)

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Positions in GOOG, C, GS, RIMM, energy
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