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Random Thoughts: Will Market Snap Back?


Stocks are down, but looking for a lift.


Editor's Note: The following is a compilation of this morning's Buzz posts and is being gathered so Minyans can benefit from Toddo's real-time stream of thought.

Gate Sniffage! - 10:01 am

  • Hit it and quit it? Man, it's like whack-a-mole out there. Be careful, the screens are having a tough time keeping up with the actual price action. Things are moving that fast yo.

  • I did, so you know, scoop some beta for a quick fix and flipped it (flipped it for real). At the same time, I punted the financial puts I carried overnight due to the traction in Fannie (FNM) and Freddie (FRE). That stylistic approach is not for everyone but I will always share my process with hopes that it adds value to yours.

  • My inclination--as it stands--is to sniff out short side opps as a function of 1) market breadth 2) overhead resistance 3) the traction in recent weeks working off the oversold condition as a function of time and price.

  • Along those lines, I may have pulled the trigga too quick on some of those puts. The great thing about trading is that you can reinstate positions at will. Just because you sold something lower (or higher) doesn't mean you can't toss your hat back in the ring. And if you don't? Opportunities are made up easier than losses.

  • I wanna see how the tape reacts to the first Snapper try. That should speak volumes regarding tone and tenor.

  • I walk tall and carry a big stick. Visitors to the 'Ville often ask why I carry my Bernie Williams signed black baseball bat around. I tell them that it's a reminder that if you get an at-bat in the World Series, you should never leave the bat on your shoulder. Win, lose or draw, take a good rip at the ball and get in the game.

  • Clapton, Winwood, Garden, Life. Excellent.

  • Hit 'em hard Minyans--let's do this.

Type Faster! - 10:33 am

I wanted to see how the first rally was absorbed and the critical action, from my perch, is whether the financials will be able to find traction. Fannie (FNM) and Freddie (FRE) thus far have--along with Blackstone (BX) and Fortress (FIG)--for the first time in a while. But the big cap banks and brokers have not--yet--and, until they do, I'm hanging with Boo.

If we couple that with some sudden supply in big beta (Baidu (BIDU), Research in Motion (RIMM), Amazon (AMZN) are pretty in pink)--which are the leaders in today's N's over S's tape--and another downside probe begins to crystallize. Trade within your means, allowing for all scenarios, light tight and bringing the fight.

Some udder observations:

  • Metals and energy, again, as I shake my head from side to side.

  • Is it me or is this a particularly long five session stretch? It feels like Thursday... of next week!

  • I was talking with a bullish buddy of mine who thinks the S&P ends the year much higher. I told him it could happen... if the dollar continues to fall out of bed.

  • I then asked him "If the S&P rallies 10% but the dollar falls 20%, is that a bull market?" He said "Nope." I then asked him to grandfather that thought to 2002 through today, as the S&P is up 18% and the dollar is off 38%. That's sorta been one of the main points in Minyanville during this six year stretch.

  • Mr. Practical recently muttered a nugget that I found interesting. "Never confuse volatility with information." True dat--just because the market (or a stock) is moving doesn't mean the reasoning is particularly sound or necessarily right.

  • I don't know about you but I could use a Maui Margarita and some Kauai Pie right about now! And no, not necessarily in that order!

Thesis Check on Aisle Five! - 11:12 am

Minyans know we like to put it out there. Last year, our ten themes scored quite well, lending credence to the saying that it's better to be lucky than smart.

As we enter the last third of the first quarter, I wanted to bring this story to your attention.

While some of my 2008 themes have thus far whiffed (pharma, dollar), my first theme--that of hedge funds buying brokers--is in full motion.

I'll tell ya, this is a full circle story if I've ever seen one and it promises to gain traction as we edge ahead.

Answers I Really Wanna Know from Ben Bernanke... - 11:20 am

  • By the time you see stagflation, won't the market--as a discounting mechanism---already have priced it in?

  • You didn't see subprime either, right big boy?

  • Are you secretly excited that Hoofy and Boo aren't grilling you?

  • How can you explain the fact that nobody has ever seen you and Trapper John MD in the same room at the same time?

  • We didn't have a conventional recession (back-to-back negative quarters of GDP) in 2000-2001. Is that the definition you're choosing to use?

  • Do you use a flowbee?

  • On a scale of 1-10, where would you peg the collective confidence at present?

  • If you had 15 minutes in a locked room alone with Alan Greenspan, would you require a blowtorch and a pair of pliers?

  • Where the heck is Franklin Raines?


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