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Random Thoughts: The Tape Does an About Face


Perhaps the turnaround is a function of many mutual funds ending their fiscal year yesterday, or could it be the Fed?

I see you've sent my letters back
and my LP records
and they're all scratched...

(The Police)

The tape isn't the only thing scratched today, as evidenced by my high noon entrance into the 'Ville. Why, you ask? I could say "morning melds" but, alas, that would be a bit of a fib. The simple truth, in a word, is balance. A number of Minyans recently pinged to say "Hey boss--you seem a bit on edge these days. Sorta wound up. Are you alright?"

The answer was "I am, you're right and yes--but not very balanced." So, last night, I celebrated my favorite holiday with close friends while dancing like nobody was watching at The Police concert. And, from there, we vibed with Sting and celebrated the journey of life. There was a time when I would feel guilty sharing that tale but I'll tell you--I needed it. This business can suck the life out of you if you're not careful and we gotta work to live, not live to work, right?

Back to life, back in reality, I strap into my turret for my self-imposed half day to find:

  • The mirror image from yesterday's scrimmage, with the S&P precisely where it was on yesterday's opening. We offered yesterday that the "double top and lower high" was still in tact, albeit barely, but given today's showing, it's more... barely.

  • Perhaps more disturbing? The new reaction low in the piggies as they forge fresh 2007 downside ground. As I wrote yesterday, either we've shifted paradigms or this action is setting up a heckuva year-end bender.

  • Why the about face with the tape? Perhaps it's a function of many mutual funds ending their fiscal year yesterday. Or it could be the realization that the Fed has one left bullet in their gun (and knowing the last one will be pointed inward). Or... seeing both sides, maybe

  • In sector stuff, the semicaps (flagged yesterday) are feeling the heat, as are the financials, as discussed, with Fortress (FIG) off 10%, while Fannie (FNM), Freddie (FRE), AIG (AIG), Citigroup (C), Merrill (MER), Morgan (MS) and Lehman (LEH) take 4%+ haircuts.

  • So why the crying eyes in this complex? The most intuitive thought is the specter of future rate cuts, which currently project a 66% chance of no action. I'm not so sure, as I continue to feel that there are a lot more skeletons in Wall Street closets.

  • I'm sticking to my $100 billion in write-offs by year-end. What I don't know, with certainty, is how effective Hank and the Banks (super-conduit) will be in soaking it all up.

  • Hope you're well, my friends---and hope you're hitting 'em hard.

Answers I Really Wanna Know...

  • Isn't a lower high (S&P) on lighter volume the stuff that ursine technical set-ups are made of?

  • Which of the major banks or brokerage firms are gonna file for bankruptcy protection?

  • Will that be the clarion call to get long the financials for a trade?

  • Does four shows in one tour make you a groupie?

  • Is Hoofy sending out an S.O.S.?

  • If crude falls precipitously, how do you think the S&P's will respond?

  • Can the tape crack while (BIDU) and Google (GOOG) dance higher?

  • If they allow BIDU to be bought by those "in country," is this puppy gonna open up $200?

  • Is Hank, er, Snapper gonna show up in the last hour to save the session?

  • With NYSE internals 5:1 negative?

  • And the BKX deep diving to '07 lows?

  • Speaking of balance, are YOU coming to the December 7th Festivus?

  • Whatever happened to that Buffett bid in Hovnanian (HOV)?

  • Isn't that a good lesson in the perils of trading on chatta?

  • Why did this morning's vibage strike such a chord with so many?

  • Seriously, don't those people work?


Holiday Festivus is here! Come join us and support the Ruby Peck Foundation For Children's Education at an old-fashioned Southern-style hoe-down in the heart of New York City on December 7th. Click the image below to learn more!

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