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Random Toughts: Winnie the Pooh!

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So you wanted to be a trader, eh?

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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 Was That A Short-Term Low?, The Jedi Mind Trick and Fists and Docs!


How Would Andy Dufresne Trade This Tape? - 12:24 pm



Winnie the Pooh! - 1:34 pm


So you wanted to be a trader, eh? I've been asking myself that question lately as it feels like we've brought a knife to a gun fight.

While I entered my metaphorical bull costume (two legs, or 50% conviction) in and around S&P 1045, it feels as if I'm swimming against the tide. Perhaps that's a good sign (the best fades are the toughest fades) or maybe I'm hoping. It's a thin line, I'll tell ya, but the onus is on us to exercise discipline over conviction.

Some top line vibes:

  • While yesterday was "the diaper effect" for most people, I'm finding today's tape to be entirely more Depend-able.

  • There are two forces in play--structural and psychological. While global governments are trying to stem contagion in the former, the latter matter is amorphous.

  • Oh yeah, it's earnings season. Don't expect anything "good" but keep in mind that news is always best at a top and worst at a bottom.

  • As John Maynard Keynes used to say, markets can stay irrational longer than most people can remain solvent.

  • IF (big if) Hoofy can hold 'em in here, there will be chatter of a (constructive) higher low. That would sync nicely with the VXO "panic" high at 70 yesterday (currently VXO 57, -4%) but this discussion will remain fluid.

  • Absent a crash--which remains plausible given the state of the credit markets--I like what I own (Weatherford (WFT), Transocean (RIG), QLD, OSX) and have the powder to add lower, should I choose to do so.

  • Nobody is smarter than the market. We're simply pawns in the greater game.

  • Away from the obvious fly that is Bank America (BAC) (and Merrill Lynch (MER)), Mother Morgan (MS) (-23%) stands out in the poke of the piggies.

  • As if we need one more thing to look at, notice that the bacon is shakin' at BKX 60 once again.

  • It's "Sell Rosh Hashanah, Buy Yom Kippur" right?

  • If you're diggin' the 'Ville, lock your spot for the holiday trot and belly up with us at the December 4th Festivus. Regardless of how the next 10% plays out, giving back to the kids--and sharing some hugs and handshakes with you community--is a profitable endeavor.

  • Whew, Ben Bernanke is speaking. And I was worried.

  • Cue the REM and take a deep breath. This too, shall pass.

  • As always, I hope this finds you well.


R.P.

Positions in WFT, RIG, QLD, OSX
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