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Random Thoughts: Gold Smelting Lower


Bears continue to stamp out the hiding spots.


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 World, Hold On?

Winnie the Pooh?!? - 9:06 am

  • Deflation, who woulda thunk it?

  • As hiding spots are stamped out, gold is smelting lower. This has been on my laundry list as a Wishbone Hedge and I'll likely initiate some exposure into $700-ish, if and when.

  • I'm being hit up left and right that LIBOR IS GETTING BETTER, LIBOR IS GETTING BETTER! True dat, but keep it in perspective Minyans. Three-month rates are still 2.33% above the Fed's target rate and twice as high as it was one month ago.

  • Not trying to be a Debbie Downer, Yo, just wanna keep it real for ye faithful.

  • Stocks--as a thermometer--are anticipating that the backbone (credit) will improve. It well might but keep in mind that the S&P is up 150 handles and the DJIA is up 1400 points in a matter of days.

  • For my part and with my coin, I punted the lion's share of my long exposure (holding onto some BHP Billiton (BHP)) while holding onto my SPY puts for Turnaround Tuesday. I plan to trade the latter matter with a trailing stop and my hat in hand.

  • Y'all see the secret footage taken from the G-8 summit?

Gate Sniffage! - 10:09 am

  • I've been scribbling "The Other Side of the Trade: Bear Trap!" which will be my syndicated column tomorrow morning (offering the alternative take on the notion that we've seen the 2008 lows). Suffice to say I'll rest easier once this view publishes.

  • What did I do this morning? Faded (read: bought back) some Weatherford (WFT) for a trade against my SPY puts. Smallish, like the hands of carnies sans the smell of cabbage.

  • Pep and I were just talkin' gold. He told me $742 was initial support and $716 is a more meaningful level. That jibes with my work (scaling into $700ish) but there's no guarantee it gets there.

  • I'm a fool to do your dirty work, oh yeah.

  • Following yesterday's Hot Popper, an upside probe makes (made?) sense. Watch breadth (2:1 negative) and LEADERSHIP, as it must emerge from tech and financials (my fear is the latter matter remains a value trap).

  • Green beans in the Red Sea? Retail (talk about swingers), Mother Morgan (MS), 3M (MMM), Deere (DE) and Sandisk (SNDK) (some of the smarter people I talk with like this name).

  • Lemme jump and toss this out. Hit 'em hard and be the ball.

Eyes of the World - 10:51 am

  • Texas Instruments (TXN) is off 9% and American Express (AXP) is up 5% so, as far as the "reaction to (negative) news" is concerned, we're Splitsville Willy.

  • Minyan Peter's "End of the Dot.Gov Bubble" is bang on in terms of what we're seeing.

  • As per the last Buzz, I bought a token position in Sandisk (SNDK) with a stop below $13 (note the gap fillage). Again, this (Weatherford (WFT) and BHP Billiton (BHP)) are against S&P puts as I trade the alpha and game the gamma.

  • Heh? What? It's all Mykonos to you? That's why we're here.

  • Yes, I'm staying nimble as Winky and I stick and move.

  • Professor Meow Mix (Adam Katz) brings up a good point (and one we've been highlighting). Just like the Internet prophecy proved true--albeit not without a tech crash--so true will globalization after the debt crash.

  • It's nutty that many of the same pundits who were (loudly) banging the table 50% higher are now running for cover. The disconnect between perception and reality is where profitability resides.

  • Doing seventeen things at once (which prolly means I'll do none of them well) so lemme hop to sixteen. Sweet sixteen, or is it fifteen? Either way, it can't arrive soon enough.

  • As always, I hope this finds you well.


Positions in BHP, SPY, WFT, BHP, SNDK

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

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