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Randoms: Buy the Cannons, Sell the Trumpets

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Building a laundry list into the meltage.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also How Will the Market React to Nationalization?


The Half Off Sale! - 9:26 am

  • There's alotta press about the 16-month, 47% decline in the DJIA. We should see a harsh defense of the 50% retracement the first time that organic two-for-one split arrives. That scenario "fits" with Pep's DeMark work, which he'll expand on shortly.

  • Please continue to keep Mexico on ye radar. Where's there's smoke, there's fuego.

  • Consistent with my recent approach, I enter today's fray with a handful of placeholders (USO, Yahoo (YHOO), Dryships (DRYS)) and alotta dry powder.

  • When (if) we see the whites of their eyes, I plan to aggressively deploy my trading capital. My long-term bucket remains 100% cash although I have dusted off 25% for deployment should the S's melt towards a 6-handle.

  • Keeping with the Boss theme this week, this puppy was too good to pass up.

  • I've got a quickie 10:00 AM interview (should last about a half hour) and then I'll be strapped in for the rest of the final fifth (fourth?) of our freaky week.

  • Good luck Minyans--be the ball.


Gate Sniffage! - 9:50 am

  • While I'm using Pep's gameplan as a framework, I've nibbled on some Research in Motion (RIMM) calls under $40.

  • Retail trades relatively dry and through that lens--and with a conscious nod that Target (TGT) has a natural expiration magnet to $30 today--I've added a snivlet of calls there too.

  • Other green beans in the Red Sea? The Homies, Applied Materials (AMAT), Novellus (NVLS), KLA-Tencor (KLAC) (the semicaps), Hewlett Packard (HPQ) and Qualcomm (QCOM).

  • For newbie Minyans in our midst, please remember that we don't "do" advice in the 'Ville--that would be disingenuous given we don't know your time horizon and risk profile. Instead, we share what we're doing, when we're doing it and how we're doing with hopes that sharing our process adds to yours.

  • Maybe right, maybe wrong--maybe the tell of all tells--but please note that my shopping list does not include financials.

  • See all sides today, Minyans, and allow an ample margin for error. This tape is a lot of things but "full of second chances" isn't among them.

  • And think positive Yo--profitability begins within.


Tango and Cash - 10:33 am

As communicated earlier on the Buzz, I bought partial positions into the morning muck with a conscious understanding that I may be early (shocker, right?). Vehicles--and that's just what they are, rental cars--include Qualcomm (QCOM), Intel (INTC), Research in Motion (RIMM), SSO, Target (TGT) (all call options) and incremental exposure in Dryships (DRYS) and the USO. I also nibbled on a small, defined risk GLD put position (gasp!) and will again note that financials are not on my laundry list.

I continue to have plenty of dry powder in my pocket should "straight up" be too easy (as I sense it is). Market internals are 5:1 negative, real risk remains stateside and abroad (Eastern Europe) and we're seeing 15-20% declines in Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC). In other words, it's dicey out there and trading "in between," if you're to trade at all, is Dear Prudence.

Before I flip lids, please be sure to read Minyan Peter's excellent take on the nationalization scenario. He's a pretty astute guy (ya think?) and he's been bang on (along with numerous other Minyan Professors) with regard to the script that is unfolding in real-time. As gratitude is latitude, lemme take a moment to say THANK YOU to our circle of trust and all ye faithful for fighting the good fight as we find our way.

R.P.


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Positions in YHOO, USO, DRYS, RIMM, TGT, QCOM, INTC, SSO, GLD
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