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Random Thoughts: Will Merrill Spur the Herd?


Financials looking for a spark, any spark.


Editor's Note: This content was posted in real time today on the Buzz & Banter. It's being shared here for the benefit of the Minyanville community.

Hanks a Lot! - 10:01 am

While I agree that a gap lower would have been optimal, the market rarely cares what I think.

Still, in the interest of full disclosure, I initiated starter positions in Merrill (MER) (a shade under $23) and Wachovia (WB) (October calls).

Nothing crazy--and never advice--but directionally, that's what I'm thinking as we eyeball Turnaround Tuesday.

The Scratch and Sniff - 10:24 am

  • Turnaround. Tuesday. Any questions?

  • On cue, crude is off 3%. Fashion me a tin foil hat and reserve me a seat on the grassy knoll!

  • Note to self: Don't be dime wise, dollar foolish. I missed a nice scoop in Granny Goldman (GS) this morning when the stock was up a buck and change.

  • What did I buy? Wachovia (WB) calls (+7%) and a Todd-lot in Merrill (MER) (common, the calls were fatter than Sherman Klump).

  • While the latter matter is higher than where I initiated risk, it's not snapping the way it should. We learned a lot just by watching yesterday and I'm gonna stay uber-tight with this particular risk leash. I've set my stop at my cost basis and won't hesitate to pull the trigger if and when.

  • So, what happened to the Yankees?

  • NYSE internals are hanging 3:1 positive. They "lag" in a futures driven tape but it's a piece to the ever-changing, multi-linear jigsaw puzzle.

  • Allmans. Weir. Jones Beach. Noice.

You can learn a lot just by watching... - 11:11 am

  • Professor Shartsis makes an interesting point, particularly as Continental (CAL) scratches the underbelly of breakdown resistance.

  • How's the "As goes the piggies, so goes the poke" correlation? True. Very true.

  • The Jerk, Animal House or Airplane?

  • For that matter, Braveheart of Gladiator?

  • Are you trading to win or trading not to lose? Big difference. HUGE.

  • So it's said and so you know, I've punted the Merrill schnitzel for a small gain. I know, I know... trailing stops keeps corks off our forks but the action is belabored and easier (less crowded) trades exist. Besides, it's "easier" given I'm gonna talk about it on TV. Onward, Maximus.

  • Does anyone else get the sense that this morning's probe wasn't, uh, probey enough? While the tea leaves hang tough, trap door potential most certainly exists.

  • Risk management (over reward chasing) remains a central tenet of effective money management.

  • I'm picking out a thermos for you. Not an ordinary thermos for you...

Lunch Meat! - 11:35 am

  • The precipice of pain is often difficult to identify while you're in the thick of it.

  • I've seen a lot in my 17 years on Wall Street but I'm not sure I've seen anything as genius as Pep's Mr. T Gold Indicator.

  • If the trap door opens below, Merrill (MER) will have told us all we needed to know. If it doesn't? Well, never mind then (hint: you can always find supportive elements to your positioning--the key is to unemotionally identify which tells "matter.")

  • Is it OK to admit that I have a fetish for airplane food?

  • The inverse correlation between crude and equities will soon be debunked. The next myth to fall will be that a higher dollar will be stock positive. It's amazing to me what passes as "fact" in today's media. Don't these people have charts?

  • What's wrong with these people? (Insert Karen Hill's mother here.)

  • TD-Ameritrade Minyans, we'll be having a snazzy webcast with myself, Pep and Television's JeffMacke Thursday at 1:00 EST. Sign-up on the TDAT home page and we'll see you there (I'll be the fat guy in the little coat).

  • As always, I hope this finds you well.

To continue these vibes, check out Random Thoughts: Tuesday Turn Again.


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Positions in WB

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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