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Shorting the Market and Buying Gold

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But does this imply financial anarchy is upon us?

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  • What trades did I make on today's open? None. I'm small and slightly less short-leaning than I was 24 hours ago.

  • I've got company in that "stick and move" thinking, according to Steve Wynn (WYNN). The "king of casinos" offered players taking wins off the table and ceasing play as one of the reasons behind his eponymous company's earnings miss last night. If you've built an empire with the sole design goal of maximizing ostentatious luxury in order to get players to stick around long enough to lose money, an environment where hiring Sheryl Crow for a party draws Congressional ire is daunting to say the least. Leaving Las Vegas, indeed.

  • That said, as a man of the people who's willing to do his part by stimulating the economy in private, I promise not to attend any Sheryl Crow concerts in 2009. Sacrifice? Sure. But I'm willing to give up jamming to the contemporary pop stylings of Lance Armstrong's ex if it means setting an example for the kids.

  • Two trades I'd make despite the financial anarchy they'd imply: Buying gold (or some derivative thereof) on a convincing break over $1000 and shorting the market if the S&P 500 tumbles below 740. Sure, I'm late the trades, and I'd be capitalizing on human misery. Cut me some slack, I just gave up Sheryl Crow.

  • Would I be late to the gold party? The comparison that leaps to mind is showing up for a New Year's Eve party tonight. Which is why I can, and will, wait for a breakout. I don't believe in triple tops or triple bottoms. Preying on human misery or not, buying breakouts and breakdowns gives you tight stop levels you don't have to think about ($1000 on gold and S&P 741, for those who skipped to this bullet). And emotional markets trade on technicals, suggesting potential "whoosh" action on each trade.

  • Regarding that Mars mission, I'm not entirely giving up hope. If we could fake the moon landings convincingly using 1969 technology and blurry footage of a Volkswagen wrapped in tin-foil, today's CGI technology could certainly give a nation struggling to believe in a nice goal for the next decade. The "mission" (wink) wouldn't save the ogre-ugly quarter DreamWorks (DWA) just turned in, but a fake Mars project beats the heck out of subsidizing a generation of workers making cars no one wants by a mile.

  • Global warming may be as phony as the moon landings but, if I'm reading between the lines of Obama's speech correctly, Toyota (TM) has the best products and the distinct advantage of not needing to beg an increasingly obnoxious and reluctant Congress for money. As rued in public, I bought around $60 and sold a painfully partial position on the move to $70. I'd be a buyer on a revisit of $60 and a seller at $70. Anything in the middle is simply noise.

    With that, I'm off to take my sleep-deprivation-driven logorrhea to my yoga instructor. Don't worry, she's been warned.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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