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Random Thoughts

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At a point today, won't the collective mindset shift to "tapes that are strong all day tend to end that way?"

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The Following Buzzes took place between 9:00 AM and 12:00 PM and are shared in the interest of real-time thought assimilation…

  • Layer Cake!
    9:41 AM


    Alrightee then, let's take a look at the Hump Day shnook.


    • NYSE internals are 3:1 positive.

    • The financials--the single white female...er, single best tell--are jazzy and snazzy.

    • Credit concerns, as measured by the CDX, have eased.

    • Cisco (CSCO) is up 6% and Chambo has his pom poms on CNBC (strongest global economy he's ever seen).

    • Europe is firmer than a college cheerleader.


So what am I doing? Buying S&P puts as we tickle S&P 1490. I started right "in here" (S&P 1488ish) and will set my stop on the other side of that ride. Please note that S&P 1505ish is a secondary resistance.

Anyone who knows me knows that I respect our tea leaves and I might be tempting fate. You can do anything as long as you're disciplined, however, and we've come full circle from greed to fear and back to greed. Right into big resistance.

  • Frosting on the Layer Cake?
    10:45 AM

    As discussed in my last Buzz---and with a wary eye on my snazzy tea leaves --I layered into some S&P puts as we traded into S&P 1490. The S-Car-Go's have almost lifted a finski (5%), effectively alleviating the oversold condition and flipping sentiment back on track, as we probe the bottom end of the previous band tag.

    So what levels are my looking at? This one (right here, right now), S&P 1505-1510 (50-day and another breakdown point) and BKX 111.5, from where the banks broke. As go the piggies, so goes the poke so I am watching that latter level with great interest on the heels of their 8% lift thus far this week.

    We opined on Monday that we would likely see a strong front-end of the week and weakness on the back nine. With our weekly Hump a mere 1.5 hours away, I'm now positioned for just that.

    Engine room, more steam!

  • Risky Business
    11:23 AM

    While I'm all about monitoring risk, I just forced myself to step out of my office---and away from the babysitter--to take a breath and gain perspective. Upon sittin' back down, the following thoughts flashed through my crowded keppe:


    • The cyclicals have been notably lag all day, with MMM, UTX, HON and BA dancing in Red Dye.

    • I've layered into puts between S&P 1488 and 1495 before unstrapping from my turret and taking a lap. I've walked through my stop signs (S&P1505-1510 and, maybe more important, BKX 111.50) and that's my context, right, wrong or indifferent.

    • Can Boo orchestrate a reversal? NYSE internals are 3:1 and the financials are still firm. Still, it could happen--but it would have to happen soon. At a point, mindsets will shift to "tapes that are strong all day tend to end that way."

    • Unless, of course, we see some forced selling and margin calls (which remain within the probability spectrum).

    • The Cisco Disco? The networking giant opened higher and has flat-lined since. So, as far as a "tell going forward," I don't see it mattering much.

    • OK, listen--buying the SPY or an index fund is NOT diversification . In many ways, they're all one and the same stock. Diversification would include some cash, some metals, foreign bonds....you get the gist.

    • Agree or disagree with Snoop Tony Dwyer, he is one of the finest gentlemen I've ever had the good fortune to know.

    • As always, I hope this finds you well.

Other Random Thoughts as we edge over the Hump…

  • So Chambo said that this is the strongest global economy that he's ever seen? Two thoughts:

    • News is always best at the top and worst at the bottom and he didn't see previous tops (2000) or bottoms (2003).

    • Aren't we supposed to sell hope and buy despair?

  • Is that a monkey in your hat or are you just happy to see me?

  • I agree, although I'm more concerned with my incessant texting while walking through New York City streets.

  • I don't know how Boo got face time with Bernanke but I'm liking it!

  • I don't know about you but I read every single word that Mr. Practical writes. I believe his latest missive is the best article he's written to date.

  • I understand that steroids don't help the hand-eye coordination needed to hit a baseball, but the record is tainted, pure and simple. It's a shame on a number of levels.

  • Good Critters take care of their own...

  • Remember the important stuff. Such as love, family and helping those entirely less fortunate than us. That's why we started the Ruby Peck Foundation for Children's Education and it's why we encourage Minyans to help us make a difference.

  • Fare ye well, Minyans---we're officially over the Hump!


R.P.

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