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Freaky Thursday Potpourri: Which Way Will We Go?


Carefully measure your risk-reward.


My goodness, are we having fun yet? This has been one of those weeks on a few different levels but alas, this is the life we've chosen. It's entirely consuming at times, a reality I used to remind myself of when I was running big money. You don't want a fund manager who doesn't take his or her performance personally and the same can be said for the content on Minyanville.

Last night, following my weekly vibe on Fox Business Happy Hour, I shared some smiles with Mr. Practical and took time to enjoy the journey. We spoke about the market dancing on the head of a pin, the ramifications of widespread dollar debasing and the cumulative comeuppance that remains on the horizon. But most of all, we spoke about our lot in life and how fortunate we are in the grand scheme.

Sometimes you gotta take a step back and appreciate the little things . The smiles, close friendships, pets, even funny words like kumquat. Now more than ever, balance and perspective will serve us in good stead. That begins within and you'd be surprised at how quickly it'll manifest in all aspects of your life.

With a deep breath and some good energy, let's hop into the Thursday dew.

  • Hoofy would argue that following Tuesday's rally, backing and filling is healthy. And he'd be right, as a matter of course, so long as headline risk remains tame and S&P 1270 and DJIA 11640 (the double bottom) holds.

  • Neither is a certainty, of course, hence the word "risk" and, by extension, the word "reward."

  • Does Qatar rhyme with Babar (you know, the children's elephant) or guitar? I couldn't tell ya but either way, it's the latest country to rethink the peg to the dollar.

  • I would lay 10-1 that they won't be the last. The risk to the hyperinflation thesis is foreign holders of dollar denominated assets screaming "Uncle Sam!"

  • Looking at the FXI, I pulled up a chart to see if there was a potential play (the first thing I do every time I consider a position for purposes of risk context). What did I find? The classic definition of a churn (under resistance). Thanks, but no thanks.

  • I don't know about you but I think Jim Rogers is a pretty sharp cookie.

  • Do you think now would be a good time to share that I'll be out of the 'Ville tomorrow? That tends to lend to volatility, we know, so I figured I sorta have a fiduciary responsibility to put it out there.

  • Does anyone else feel like Mike Peters and Trent Walker lately? The funniest part of this bullet is that when I Googled "Swingers" to get the clip, someone walked by my desk and saw, well, what you might expect would pop up when you Google Swingers.

Yesterday afternoon, the following posts appeared on the Minyanville Buzz & Banter, which is real good in real-time. Really. If you wanna test drive a gratis trial, it would be our absolute pleasure to hook you up.

That Boy is a P-I-G Pig!
Todd Harrison
2:30 EST

Speaking of slobs--or Schlumberger (SLB), as the case may be--I've been chewing through a few charts trying to redefine an exit strategy.

The first one I looked at was the three day action, which includes the aforementioned gap to $83. I will be picking in there--if and when--as a function of discipline.

The longer-term chart, however, finds multiple bottoms right around the same level. Indeed, with "fresh" eyes, one could make the case that a break of $83 is the level to get short.

I'm no crude specialist and I certainly don't plan to "invest" in the short side. I'm a trader and trades are made to be taken. I'll wonder aloud, however, if the drillers can't rally with crude at $110, what's gonna happen when it reverses back to par ($100)?

Just thinking aloud as we find our way. And so it's said, Trading Gods, I'm trailing my stops the other way should you decide to ramp these names higher and teach me with yet another spoonful of humble pie.

Smoke Signals
Todd Harrison
3:54 EST

Remember earlier, when I referenced the writing on the wall and the scribblin' we've seen since?

On the back of the massive injection yesterday by the Federal Reserve--and now, the eye-popping, out-sized run in the Long Bond--I would offer that IF another shoe is gonna fall, Imelda Marcos will have been well warned.

Actionable? Invisible catalysts rarely are. Worth factoring into your overnight risk profile? I believe it is.

Chances Are
Jason Roney
3:57 EST

"Just a quick fun fact: Looking at past times we've closed up 2% and what happens and adding in the qualifier that the next day (today in this case) we form a higher high but reverse to close down at least -0.5%.

The next day futures open lower 83% of time, trade higher 100% of time and close above open 75% of time (just 12 occurrences)."

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