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Random Thoughts: Homies Act Snazzy, Micron Not So Much


Expect to see posturing in front of Friday's Breakfast with Beeks.

  • After trading up 12% into its earnings release, Micron (MU) has given back 10% on the report. Management said the near-term environment was "challenging," inventory increased quarter over quarter and they downplayed the sale of a unit.

  • The question, quite naturally, is whether this process of buying the rumor and selling the news will be the exception or the rule when earnings arrive by the truckload in coming weeks.

  • Pop-N-Drop! The Hang Seng, after rallying last night by 700 points to a new high, subsequently collapsed by 1400 points(6%) to close at 27,500. Different field position, I know (those markets have been parabolic frolics) but worth noting nonetheless.

  • The BKX and XBD (banks and brokers) remain central tells for the market swell. They've acted great of late but continue to offer classic non-confirmations of the recent market moxie. We touched on the technical levels yesterday and they're just as pertinent today.

  • YO! Have you seen the Minyanville "hand" sign? Boo offers it up with his paw at the end of this week's episode.

  • There are no victory laps in the 'Ville and we've certainly had our fair share of missteps (hand raised as I've been chill and chiller). Still, I echo the snaps to Coops De Ville and Q-Tip on prescient vibes on the FXI downside gap. Eight overnight points (4%) is eight overnight points.

  • Speaking of emerging markets, there was a monster truck buyer of EEM December 180 calls this morning.

  • "I know more than you think. You think more than you know---knowledge isn't the same thing as wisdom." Many thanks to the Minyans who urged me to watch The Peaceful Warrior. It took me a few months to get around to it but yes, it was certainly Minyanesque.

  • Perspective check! The VXO has quietly edged up 13% off the Monday low but remains over 50% lower than the August angst.

  • Expect to see posturing in front of Friday's Breakfast with Beeks. The bulls are whispering that they wanna see a weak number (to spark future rate cuts) but, at a point, economic weakness will again be viewed as a negative (I don't profess to know when this sentiment shift will occur).

  • I would also keep tomorrow's ECB meeting on your radar lest we see a "surprise" cut.

  • We've been busy beavers in front of the December 7th NYC "Circle of Trust" Festivus to Benefit Children's Education. We'll be opening the gates by next week and, while space will be limited, we surely hope to see you there.

  • Standout action to these eyes? The snazzy action in the brokers (note the first resistance in the XBD), the stealth rally in the dollar (DXY +30 bips), the negative breadth (skewed by fixed income), the hip hopping homies (HGX +2%) and draggage in the semis (-2%, skewed by MU).

  • So, Bear Stearns sliced 310 jobs from its mortgage operations. It's worth noting the reaction of the stock, which is slipping on the news. This is the type of news that can be viewed through two lenses---bullish (ie Citi and UBS) or bearish (problems persist). You can learn a lot just by watching so keep your eyes peeled for clues in the muse.

Monkey? I'm a Gorilla You Clown!

Are you really that surprised that Ben Bernanke spoke with Robert Rubin and other Wall Street executives in the heat of the August angst? I'll lay odds that JP Morgan, Bank America and Wachovia were also on the speed dial.

Not to say that's necessarily wrong---the Fed's job is to buffer financial markets during times of crisis. My chief beef with the central bank stems from the fact that they've been "proactively involved" for many years. In my view, Alan Greenspan is largely responsible for the imbalances continue to percolate under the seemingly sanguine surface.

During that stretch, we talked about the battle between the 800-pound gorilla (credit crunch) and the elephants in the room (central banks). It was bananas, I know, but the gorillas got stuffed as sentiment shifted. We spoke about that this morning and, with a conscious nod to the persistent bid, continue to watch what is, by all accounts, one of the more interesting junctures in the history of financial markets.

As always, I hope this finds you well.

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