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Random Thoughts: The Trap Door in Crude


Bids in oil were disappearing.

  • There is a difference between legitimate economic growth and credit-fed consumption. Keep that in mind when you're talking about the retailers.

  • While you were peeping, the bids disappeared in crude and that's pressuring the drillers. As discussed on yesterday's Buzz, I went home short Schlumberger (SLB) and Halliburton (HAL) (via puts) and have been trading around those positions.

  • In the interest of communicating my stylistic approach, I peeled out of the lion's share of Schlumberger (into the $4 downside reversal) as I rotate risk and squirrel some acorns. Still there in Halliburton, much to Dick Cheney's chagrin.

  • Talk about tossing all your chips on eight the hard way! In 2006, Fannie Mae (FNM) and Freddie Mac (FRE) accounted for 39% of new conventional mortgage issuance. During the first quarter of this year, they're responsible for 80%!

  • Too big too fail? Maybe. Too big to nationalize? No Siree Bob… patiently watch and you'll see a saga unfold that currently seems inconceivable!

  • Why did I cover up Goldman (GS)? I spied traction in Lehman (LEH) and Merrill (MER) out of the gate. Of course, Granny now looks like she's gonna pin $185, leaving a few shekels on the table for yours truly. I hate it when that happens!

  • How is Sir Isaac Newton trading Apple (AAPL)? With a stop on the other side of $193 (recent highs). Big beta demands defined risk and that's how I roll, yo.

  • We always talk about how the retest of an acne level (breakout point) as the Textbook Technical zone with which to accumulate exposure. After yesterday's Pop & Drop, the tape held precisely at S&P 1405, NDX 2000, Russell 735 and (near) INDU 12800.

  • There is real risk to this tape (although that doesn't mean it's today's business). I'll offer once again, however, that IF Hoofy can put some distance between him and those levels, back-to-back trap doors might be too "easy."

  • I'm not playing the upside, per se-I have some put positions (SLB, HAL and Apple are the movers du jour), core longs (McClatchy (MNI), Gannett (GCI)) and Plenty O' Powder (I wonder if he knows Patio Furniture?). I'm not opposed to "make it to take it" rentals if they present themselves but I haven't squeezed those triggers yet.

  • So Big Ben strenuously urges banks to raise capital. I wonder if he can handle the truth about how dilutive (deflationary) that continued course of action will be.

  • Ya ever see the ESPN segments called "Miked up?" Take that to the next level and you'll get a sense of what this week-and my life going forward-is all about. I told the good folks at FOX Business that if we're gonna do Minyanville Buzz & Banter TV (every day at 11:38 and from 3-4 EST), I'm going to speak freely from the gut. Yesterday, when I opined that the tape has more swings than a Hedonism Vacation, I think they sorta understood what I meant!

  • If you're diggin' the 'Ville, please help us spread the word. That's how we grow, step by step, brick by brick and Minyan by Minyan. Thanks!


Positions in HAL, SLB, AAPL, VIX, MNI, GCI

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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