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Random Thoughts: The Point of Recognition


The moment of clarity will eventually arrive.

Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Mickey Mantle Won't Pay Our Rent, Dusting Off the Bull Costume, Miso Horny?, Capitulation Now?, The Unfreezing Process and There's a Sale at (for) Pennies!

Where Are You Going Now My Love? Where Will You Be Tomorrow? - 2:56 pm

Stephen Stills once sang "Rejoice, rejoice we have no choice but to Carry On." Truer words have never been spoken and I'll remind ye faithful to, well, keep the faith as we together find our way.

That's not to say this is "easy" but a phoenix will arise from this scorched earth. We simply need to ensure that our birds of a feather flock together until that moment of clarity arrives.

Some additional thoughts as we sort through the ashes:

  • I said to Pep "rally attempt during contra-hour, heavy close when redemptions hit and Turnaround Tuesday rally?" He responded that he would like to see the S's close in triple digits if the counter-trend rally is to have legs.

  • File this under "sometimes right, sometimes wrong, always honest," the average cost basis on the two legs of my bull costume is S&P 1045. The trick is that it's a pure trade and discipline over conviction is echoing in my head.

  • The blessing and the curse is that many of my plays are through common stock, not options. Net/net, I wanna like what I own and--if I'm gonna carry it overnight--I gotta be willing to buy it lower.

  • The funny thing is that someone is coming to Minyanville for the first time and saying to themselves "Oh, they're just a bunch of bulls." Heh heh.

  • Over in "Anecdotal Evidence R' Us," the same folks I asked to PAY ATTENTION at the end of August (they said "I'm not invested, I just have my 401(k)") are now pinging to tell me that we're entering a Depression and they need to get out of the market now. Take that with a grain of salt but it I found it interesting.

  • In addition to "lower crude is equity positive," I think we can officially debunk that a higher dollar is good for stocks.

  • On the upside, we've only got 1012 S&P points left until ultimate support.

  • I caught some heat for loading the boat in energy and metals in 2003 and was absolutely undressed for punting all of my commodity exposure into year-end 2007.

  • While I'm trading some GLD puts around (one of the few schnitzels I'm in the money on), I'm feeling alright with my energy equity exposure (including Weatherford (WFT) and Transocean (RIG)).

  • Famous last words, I know, but I'm more inclined to keep situations over pure market exposure.

  • Remember, the MV litmus test is "Am I alright up or down 5% from here." Keep that front and center as you weigh your overnight risk profile tonight.

  • I've gotta jump and juggle and ready for the afternoon Truman Show Segment. I sincerely hope this finds you well, balanced and in control of your emotions.

  • Fare ye well into the bell.

And to think, we've still got 106 miles to Chicago... - 3:31 pm

I'm jugglin' more balls than a prepubescent Larry Bird--basketballs, come on, Minyanville is a family community--but, as the flicks be tickin', I wanna share my fare for those who care.

  • My first trade "out ze door?" The GLD puts. Not because it was the green seed on my once pukey sheets, but as a function of the potential for a massive global rate cut tomorrow.

  • In response to all my friends and family who have finally arrived at the point of recognition, my response has been uniform. This is healthy and positive--we needed to go through this to get through this." Old news for ye faithful, I know, but so it's said.

  • And just like that, the bull costume is at the money (S&P 1045). Not counting any shekels before they're booked--Eddie Mush ain't allowed in the 'Ville--but keeping it real and remaining conscious that thou giveth and thou taketh away.

  • And yes, I'm making some sales against my "close my eye diaper effect buys." Discipline over conviction seven ways till Sunday... particularly as 3:30 looms.

  • Yeah, that coulda been "too early" in terms of the Snapper. Trading in between allows for all scenarios. For purposes of my metaphorical imagery, I've still got two legs in my bull costume (50% conviction).

  • I just offered that "take" to my friend Snoop Tony Dwyer, with a tongue in cheek comment (to him) that too many people are playing the sun blowing up. Old schoolers know just what I'm talking about.

  • Gotta hop. Be well, my friends.

Sorry, Charlie... - 3:58 pm

With all due respect to Bonnie Tyler and Turnaround Tuesday--and due in no small part to the 55 handle rally off the lows (20 handle gain from our bull suit average), I'm slipping one leg out, which leaves one leg, or 25% conviction on the long side.


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Positions in GLD, WFT, RIG
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