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Random Thoughts: Fear of Losing Becomes Fear of Missing

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Rally changing minds all over the Street.

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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 Have We Turned the Corner?


Gate Sniffage - 10:05 am

  • After paring the meat of my exposure (added Thursday) into yesterday's upside jam job, I've dipped a toe back into the USO this morning on the 5% dip.

  • Ditto a snivlet of Research in Motion (RIMM). I've been trading this name from the long side but came into today's session flat. You can learn a lot just by watching (it opened red in a green tape, which is typically a sign of supply) but I've gingerly added some January calls with the stock -7% and defined risk on the other side of $40. Just tradin', Tex.

  • It's Turnaround Tuesday Ms. Tyler, so all we have to do is identify the prevailing trend and take the other side for a trade?

  • Slapshot never got the snaps it deserved.

  • I would imagine that alotta fund managers want the tape to trade lower. Why? In the mutual fund world, under-performance is the only thing worse than absolute losses.

  • I finally figured out what it would take to get Google (GOOG) to rally. My sale.

  • Gratitude is latitude, Yo. Be thankful for what you have rather than stressing about what you don't.

  • The S&P is up 17% in a matter of days (and down 41% year-to-date). Keep both of those factoids in your keppe as we digest our immediate future.

  • Note the financials, which are sticky green and gaining steam. As go the piggies, so goes the poke.

  • S&P 840 has fripped back to support, if and when.

  • And smile Dog--we're a matter of hours away from some top-button turkey time.



Bonnie Tyler's Revenge - 11:26 am

Following a seven hour 17% upside sprint, the market is in digestion mode as we edge through Turnaround Tuesday. Some pause to reflect shouldn't shock anyone as the "denial-migration-panic" process permeates and potentially jumps the shark from "fear of losing" to fear of missing."

Some top-line vibes as we figure it all out:

  • The ability to hold S&P 840 will go a long way in shifting the above mentioned dynamic. Technicals may be a context with which to frame risk but they shape psychology during times of confusion. And make no mistake, we're in EPMD mode in that regard.

  • One element to watch--and something Pep has touched on--is the ability for sectors to differentiate themselves from one another. For months, the selling has been monolithic and indiscriminate. Sector rotation is the first step towards normalization.

  • As discussed real-time on yesterday's Buzz, I punted the meat of my upside exposure into these levels with one eye on Bonnie and the other on Winky (hit it to quit it). I've dipped a toe back into some upside exposure into this morning's scorn (Research in Motion (RIMM), USO) and will trade the former with a tight stop and the latter as a function of time and price.

  • The homies stand out today (Lennar (LEN) up 35%) and that warrants a mention. Why? Easy Cheesie, they were the first sector to lead us lower. Remember the progression we mapped in Minyanville many moons ago: Homies to financials to financials in drag (General Motors (GM), General Electric (GE), Ford (F)) to consumers, industrials, tech and commodities.

  • Map, shmap--nobody really cares "who" nailed this thing on the downside, they simply wanna know how and when we'll eventually emerge. Along those lines, we've been asking Minyans to offer their thoughts on potential solutions. Minyan Mike O'Rourke of BTIG offers some salient thoughts in that regard.

  • Heads up, Minyans, while we expect 350 Minyans to commingle at next week's Festivus, we'll likely hang the "SOLD OUT" sign on registration when we tag 300 (and we're a handful from that level now). If you wanna join us--and you most certainly should--pull the trigger. That's one piece of advice I'm entirely comfortable offering ye faithful.

  • As always, I hope this finds you cookin' with oil.


R.P.


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 USO, RIMM
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