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Freaky Friday Potpourri: Peace, Love and Expiration

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Edging through the summer of love.

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It's expiration Friday on the final fifth of our Freaky Week. As Minyans know, these derivative influences typically manifest on the sessions prior to expiry through increased volatility in the underlying equities. On the day options are actually buried, the action is bookended by the bells when the last rights are read for index options in the morning and individual stocks in the afternoon.

On a slightly separate note and in the interest of communication, we're hosting a Woodstock themed Hippiefest tonight in celebration of my 40th (next week) and several friends, including the savvy soothsaying sommelier Jeff Saut, the incomparable Smita Sadana, Nancy "Mrs. Blue Steel" Sedacca and Branden "Metro" Rife will be swinging through the 'Ville for hugs, handshakes and Minyan related vibe sessions.

The "bad" news is that my content will be intermittent as I duck in and out of meetings and enjoy the purpose of the journey throughout the day. The good news is that, in the spirit of the day, I'll do my best to vibe some authentic Woodstock themed tunes on the Buzz for those of you who care about such things.

Throughout it all, as always, I'll offer my very best thoughts on where we stand, where we're going and how we're gonna get there.

And so we go...

  • The opening act of Woodstock? Richie Havens, natch.

  • Research in Motion (RIMM) is a tell today through the lens of "reaction to news" following yesterday's earnings.

  • As an aside, I warned ye faithful yesterday about how fat front month option premiums were. With the stock a buck and change from the close, alotta option holders--puts and calls alike--are learning a real-time lesson in theta decay. Been there, and it... sucks.

  • Consistent with recent discussions, I've been operating from the short side of late with one eye on S&P 920 and the other on the entirely more meaningful S&P 950.

  • As the first half hour is always noisy--particularly on expiration--I called an audible and doubled down on my heretofore smallish S&P put position.

  • Why? Two reasons. First, the out-of-the-gate action in Wells Fargo (WFC), JPMorgan (JPM), Goldman Sachs (GS) and Morgan Stanley (MS) intrigued me and second, we've still got S&P 950 above (not rationalizing, just sayin'). I will retake the tape's temperature once the dust settles and map next steps from there.

  • I will retake the tape's temperature once the dust settles and map next steps from there. One option is to reset stops above the daily high and the other is to "trade around" that risk under S&P 950. We'll be discussing it in real-time on the Buzz & Banter.

  • The New America Foundation asked me to speak on the future of Wall Street last night. My fellow panelist was Kate Kelly, author of Street Fighters: The Last 72 Hours of Bear Stearns.

  • I must tell you how impressed I was with Kate and share that once I picked up her book for some last minute due diligence, I couldn't put it down. I was in the Bear Stearns corporate board room the night before the wheels fell off the wagon but her account is downright gripping.

  • Paul Kangas from NBR and I recently vibed on financial regulation, our current market crossroads and some Memoirs vibes, for those with an interest in a quick video clip.

  • We've been talking about the policy makers who allowed the conditional elements of the financial crisis to percolate past the tipping point, along with the caveats of allowing the pendulum to swing to far in the other direction.

  • To that end, I always like being on the same page as Mr. Practical.

  • There are no pundits but there are super-savvy seers in the marketplace. One of them-and one of the all-time good guys in this world-just walked into my digs and I'm gonna share some smiles with Senor Saut.

  • Have a great weekend, Minyans, and remember-profitability begins within!


R.P.

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