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Randoms: Bear Costume Update

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Hitting for average rather than power.

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  • Minyans just don't see "what," they ask "why?"

  • Citigroup (C) is a primary tell today through the lens of "reaction to news being more important than the news (Bank of America (BAC) upgrade) itself."

  • Professor "Metro" (aka B-Rife) has been all over the China Syndrome (-3% overnight, 12% in the last 8 days), noting the double top that broke a double bottom.

  • I took his vibe one step further and juxtaposed Shanghai to the NASDAQ. It's early, I know but it's worth a look, particularly given the confluence of resistance that intersects precisely at the 50% retracement of the entire slide from the 2007 top.

  • She's fallen and I can't get up? Maybe, maybe not, but the dandruff in Granny Goldman (GS) is worthy of a mention. A trade through $159 will seemingly trigger some downside dandruff.

  • Shadow boxing with a mirror! The weirdest action of the last few weeks is that when the tape is sloppy, Research in Motion (RIMM) is dry and when the tape is jiggy, RIMM is a fly in the try.

  • I am, so you know, still lugging some lottery tickets $60-line puts in the name with one eye on the dandruff and the other on the downside gap (between $50 and $57). It's part set-up, part tape call and part edgeless. It's a legacy, sorta like Flounder, which I'll peel into any squeal.

  • Remember on Wednesday when I was adding back some Powershares (QQQQ) December puts into NDX 1625ish with hopes of "tethering out" October puts on a dip down? As the NDX probed 1600 (and filled the parabolic pre-FOMC gap), I did just that. For those keeping track at home, this is the third time that I've sold blips (into NDX 1630) and nibbled on dips (at NDX 1600) as I trade around a broader thesis.

  • Along those lines, and consistent with my relative risk, I'm gonna humbly slip an arm out of my metaphorical bear costume, leaves 2 legs, or 50% conviction on the short-side. Given my covers, I now have this trade set up for a push, at worst. Why? My predetermined stop loss level is 2% above NASDAQ 2000.

  • While it's true that I have a longstanding habit of catching cusps and cutting bait-the proverbial premature evacuation-I will offer that the bear costume appendage removal is a function of a few things:

    • The first is the set-up, which we offered last week was the most compelling of the year. As we slip away from that pivot point, the "edge" rounds on a relative basis.

    • Discipline trumps conviction. While I was "all in" for a trade (100% conviction when I initiated risk at NASDAQ 2007), the three-peat 2% scalps, (as we probed the lower end of the recent trend channel) begs some "in between" respect.

    • It's all about "risk management" in these parts, with some legs alone the way. Crafting a risk-reward that gives me a "free look" at the downside is a profile I'll rarely say shy away from.

    • There's still the potential that the sideways slither between NDX 1580 and NDX 1630 is working off the overbought condition as a function of time. See both sides, Minyans, always see both sides.

  • What are my thoughts bigger picture?

  • Lest there is ANY confusion, that wasn't a victory lap-we don't do them when a trade is booked much less when risk is outstanding. That's asking for trouble and I get into enough of that on my own, thankyouverymuch.

  • Remember in 2007 when I offered that the biggest risk was that we were trading at all-time highs but nobody felt like we were at all-time highs?

  • That spoke to social mood and risk-appetites shaping financial markets. I bring this up as I think it's as pertinent today-if not more so-as it was then.

  • I have a smallish short position in the S&P (most of my risk is tech-centric as a function of the set-up and tracking risk). In terms of that position, I'll stop that puppy out if Snapper busts a meaningful move into four-digit land.

  • The Autumn Wind is a Pirate! I LOVE this time of year. Why? My beloved Raiders are tied for first! Raider Nation. Just win, baby!

  • Bad seasons define good fans just like bad times define good friends.

  • In a world of economic turbulence and confusion with disaster lurking at every turn, where does one go for answers?

  • Do you believe Minyanville is using new media to affect positive change in the world? If so-and only if so-weigh on in! Ye faithful did so last year and almost fried their servers!

  • 23-year old Minyan Will chimed in this morning to express his appreciation of the 'Ville but offered that I often date myself with the music. Jeez, tell me how you really feel! I am old! Anyway, he offered this song as being an apt tune for the current swoon. Fair nuff, friend, here ya go.

  • As I was emailing with a Minyan about Bennet and sent him this tribute, I took the time to read it again and it provided a mindful pause. I share it with ye faithful for one reason and one reason only. Perspective. We miss you cookie.

  • I sincerely hope this finds you well and hitting our requisite respite with a smile on your puss and some jingle in your jeans. Thank you for being you.


R.P.

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