Kass: Trading the Day on the Long Side

These blog posts originally appeared on RealMoney Silver on July 16.

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It's Different This Time (Part Deux)

7:22 a.m. EDT

"But in all my experience, I have never been in any accident ... of any sort worth speaking about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort."

-- E.J. Smith, Captain, RMS Titanic

Black Swans are large, impactful, hard-to-predict rare events beyond the realm of normal expectations based on experiential knowledge.

The Black Swan that surfaced in debt/credit last year has now migrated into equities.

Systemic risks, not normally considered, are in full force and color investors' assessments of the ramifications of plummeting housing prices, higher energy prices and in all things financial.

It's different this time, again.

And the Black Swan mentality is why a 25% market drop (from the peak) is now in focus.

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Two Interesting Charts

8:00 a.m. EDT

Here are two interesting charts that examine the relative performance between financials via the Financials Select Sector SPDR (XLF Quote) and technology via the Technology Select Sector SPDR (XLK Quote).

XLF vs. XLK -- Relative Strength

Click here for larger image.

Source: Bloomberg

XLK vs. XLF -- Relative Strength

Click here for larger image.

Source: Bloomberg

Makes me say, Hmmm....

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WFC Beats, Raises Divvy

8:06 a.m. EDT

Wells Fargo (WFC Quote) raises its dividend and handily beats consensus estimates.

From my perch, this should dispel some of the concerns regarding the banking system.

Though I have been terribly wrong on the group, Wells Fargo is my largest bank long.

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The Aflac Duck, Not the Black Swan?

9:05 a.m. EDT

What if equities are not facing a Black Swan event?

What if the Black Swan is really the Aflac (AFL Quote) duck after it rolled in the mud?

Case in point: the more bullish case on current valuations.

Four important mergers were announced recently -- Anheuser-Busch (BUD Quote), Hercules (HPC Quote), Rohm and Haas (ROH Quote) and today Alpha Natural Resources (ANR Quote). The first three takeovers were done for cash, not Chinese paper (equities); the Alpha deal is a combination of cash and stock.