• This is one of the best trading backdrops for opportunistic traders in many years.

The volatile swings and moves in the last five trading days underscore my belief that this is one of the best trading backdrops for opportunistic traders in many years.

But quick trades are not for everyone.

Many have risk profiles that are more conservative, and many just don't want to play the quick trading game.

As such, I have selected my long ideas (a few more coming up!) as stocks for all seasons and attractive over the intermediate time frame based on their individual risk/reward ratios.

That said I continue to look for a year in which the S&P 500 drops by 5% to 15%.

• Our selective long book is doing well.

Selectivity is paying off.

Our long book is doing well in a down tape, including Ocwen (OCN, our newest Kass Katch), Baxter (BAX), Bon-Ton (BONT), Potash (POT), Citigroup (C), Northwest Bancshares (NWBI) and General Motors (GM). Monitise (MONI.L/MONIF), however, continues its schmeissing.

On the downside, Tesla (TSLA) is down another $9 a share, and this morning's latest short, iShares China Large-Cap ETF (FXI), appears to be weakening.

• It trumps staring at the machine.

I am in between a number of productive research meetings, so out of touch.

I do see the reversal of markets that I surmised could occur in a prior post.

On a day like this, research trumps staring at the machine.

I will stick by my early observation that erring on the side of conservatism makes sense now.;

• But I can't, so I won't.

With S&P futures up 11 handles, I would be shorting the strength now, but I have too many meetings and will be out of touch most of the day.

• At $35.50.

I have shorted iShares China Large-Cap ETF (FXI) at $35.50, and I am placing the short on my Best Ideas list.

• Also, CPI and Empire manufacturing.

And below is Goldman Sachs' take on the economic releases this morning:

BOTTOM LINE: Headline and core consumer prices increased more than expected in March, in large part due to a firming in shelter prices. The Empire manufacturing index was weaker than expected in April.

MAIN POINTS:

1. The headline CPI rose 0.2% in March (vs. consensus +0.1%). Core prices increased 0.20% on an unrounded basis (vs. consensus +0.1%), the fastest rate of increase in fourteen months. Prices in all three main categories of the core rose at a faster rate, with the largest pickup in shelter (+13bps to +0.32%), followed by core goods (+9bps to Flat), and core services ex-shelter (+4 bps to +0.24%). Within shelter, both rent of primary residence and owners' equivalent rent moved up one-tenth to +0.3%, following softer prints in January and February. In core goods, apparel inflation rose six-tenths to +0.3%, while used car inflation rose five-tenths to +0.4%, consistent with moves in the Manheim index in recent months. Outside of the core, energy prices were roughly flat (-0.1%), as a 1.7% decline in seasonally-adjusted motor fuel prices offset a 2.6% increase in energy services (utilities). Food prices rose an above-trend 0.4% for the second consecutive month, reflecting in part the effect of recent droughts. Over the past year the headline CPI has increased 1.5% and the core CPI rose 1.7%, consistent with subdued inflationary pressure.

2. The Empire manufacturing index fell to +1.3 in April (vs. consensus +8.0), from +5.6 in March. By component, new orders (-5.9pt to -2.8) and shipments (-0.8pt to +3.2) declined, while employment (+2.3pt to +8.2) improved. Regarding forward-looking expectations, the planned capital expenditures index jumped to its highest level in eight months (+7.0pt to +23.5).

3. Based on today's CPI report and last week's PPI report, we forecast +0.2% for the headline PCE price index in March and +0.17% for the core PCE price index.

• Rumor has it.

My gnome is hearing vague rumors of a BHP Billiton (BHP)  takeout of Potash (POT).

I don't believe it.

• Namely, CPI and New York manufacturing.

The Lindsey Group's Peter Boockvar on this morning's economic data:

CPI in March ran a touch hotter than expected, rising .2% both headline and core m/o/m. The .2% headline gain matches the most since June and the y/o/y gain of 1.5% is up from 1.1% last month. The core rate is higher by 1.7% y/o/y, matching the most since August. Rent again is a major inflation issue as OER rose .3% m/o/m and 2.6% y/o/y and Rent of Primary Residence was also up by .3% and 2.9% y/o/y. This is likely the largest cost of living for 35% of households (the most since 1996). Overall services inflation rose by 2.7% y/o/y and 2.3% ex energy. Energy prices kept a lid on the headline, falling .1% but that should reverse itself in April as gasoline prices are at the highest level since July. Food prices jumped by a sharp .4% m/o/m for a 2nd straight month. Overall commodity prices were lower by .1% m/o/m and .2% y/o/y but this should also reverse to the upside in coming months. Apparel prices rose by .3% and medical care was up by .2%. New car prices were flat m/o/m but rose .4% for used cars. Bottom line, disinflation should be the last thing the Fed should be worried about as today's CPI figure follows higher than expected readings in PPI and import prices and a multi year high level in worker compensation within the NFIB small business index last week. That there is little to no inflation is the broad consensus, particularly in the halls of central banks and the IMF and I'd recommend taking the other side of that trade. This shift higher in inflation that I see however will be a process, not an event but I believe that process has begun. The 2 yr inflation breakeven is rising 3 bps to 1.76% to the most in a month in response.

Manufacturing in the NY region moderated to 1.3 in April from 5.6 in March, 4.5 in February and below the estimate of 8.0. It's the weakest since November and certainly can't be blamed on the weather. New Orders went negative to -2.8 from +3.3 while Backlogs remained negative but a bit less so at -13.3 from -16.5. Employment rose 2.5 pts but only after falling by 5.5 pts in March. Inventories fell 10 pts to -3.1. Prices Paid rose 1 pt and Prices Received were higher by 8 pts. The overall 6 month outlook rose to 38.2 from 33.2 but just puts it back to the February level of 39.0. Bottom line, this number is highly volatile but there was no Spring break out after the tough winter. While it's the first April industrial figure, it's just one and we'll see the Philly report on Thursday to either confirm or contrast with NY.

• The market's unpredictability and volatility dictates that we should err on the side of conservatism.

I would caution that yesterday's reversal and this morning's futures strength may be temporary and may hold no particular meaning.

Regardless of view, the market's unpredictability and volatility dictates that we should err on the side of conservatism.

I am market-neutral with my lowest gross and net exposure in the last 18 months this morning.

• Be forewarned.

Both copper and gold are in a free-fall this morning.

Be forewarned.

• Proceed with caution.

Sir Mark Grant on the art of being cautious:

"The power of accurate observation is commonly called cynicism by those who haven't got it."

-George Bernard Shaw

I am neither a cynic nor a bear. What I am is cautious. I know how money is made and I know that the velocity of loss is almost always far greater than that of gain. Consequently I concentrate on how not to lose money. People constantly call me a bear and I say, "Rubbish." That is not what I am or what I do.

"Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumored by many. Do not believe in anything simply because it is found written...Do not believe in traditions because they have been handed down for many generations. But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it and live up to it."

-Buddha

Also I am not a hedge fund, find the next carry trade guru. I do not do that nor do I pretend to do that. Neither do I make calls exploiting the "end of the world" to aggrandize my name for a brief moment. I have stood on Wall Street for forty years this month and I am still here. I listen, I learn but I do not flinch. I do not believe in the end of the world or of the financial markets. What I concentrate on is grabbing reality by its horns, looking at the numbers and ignoring the hype, the tripe handed out by politicians and those with some axe to grind and providing some solid financial  guidance for those institutions that are primarily investors and not speculators. This is where I stand.

"There are three kinds of men. The ones that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves."

-Will Rogers

Grant's Rules for Investing have stood the test of four decades. Rule 1 which is every rule 1-10 is "Preservation of Capital." You blow the money then you blow your job and maybe your firm. I provide every prescription possible not to lose money. I spend time warning where you might lose money and if it not lost then at least you were prepared to make rational decisions to protect the capital that you have accumulated. Rule 11 is to "Make Money." Rule 12 is to sell anything, immediately, when a company is under Federal investigation for Fraud. Rule 12 is to sell any securities, immediately, when a company gets a "going concern" notice from its auditors.

"Reason, observation and experience; the holy trinity..."

-Robert Green Ingersoll

My experience with traders is that they do one-half of a good job. It takes no intellectually capacity of any sort to ask for bids or offers and wrangle about the last eighth. What it does take to be good as a trader is to spend your time looking for the gems that float by or at least pick a guy or two that you trust to provide what he thinks has value. I would not use the lead banks for this. My experience here is that many will front run you, for their own good, if they know what you are looking to buy or sell. Your coverage tells his trader who tells the other traders and soon you are behind the eight ball. Some firms take the tact of telling nothing to anyone but that is also self-defeating. Pick your spots and pick your people.

"It has been my observation that most people get ahead during the time that others waste."

-Henry Ford

If you are portfolio manager then stay on your traders to do the job they are getting paid to do. Pick a few guys outside of your firm and speak to them. What do they see? No matter how brilliant your investment committee, it is often dominated by one or two guys and a decent warning or a good idea is often found outside of your group. No one owns either and interaction often leads to success or may even lead to solidifying your own position but these kinds of conversations can be extremely worthwhile!

"When Kepler found his long-cherished belief did not agree with the most precise observation, he accepted the uncomfortable fact. He preferred the hard truth to his dearest illusions;..."

-Dr. Carl Sagan

If you are one of the senior guys in your shop then demand excellence from those below you and deliver it yourself. I suggest listening more than speaking and then formulating a conclusion. Also pick a few outside guys that you respect and continually ask, "Do you think we have this right?" Asking for outside help is like hiring a consultant for free. No one on earth always sees everything or interprets it correctly. My recent observation about the Fed and the ECB holding rates down for the good of their nations is a powerful disagreement with conventional wisdom. The governments are in, free markets analysis is no longer applicable which is why all thirteen of the lead banks erred in their call on interest rates at the beginning of the year. Things change, accept that premise and then redirect your thinking in-line with what has changed. Don't get stuck in a past that no longer exists. Stare hard at the horizon.

"All perceiving is also thinking, all reasoning is also intuition, all observation is also invention."

-Rudolf Arnheim

We play the Great Game to win. Some days I provide market insights that I think are important. You may accept them, reject them, but hopefully your little grey cells are set in motion. I provide some fertile ground. You sow the seeds that you find and wish to use. As important as these warnings and ideas however are the manner in which you play. Sportsmanship, creativity, strategic thinking and a will to succeed are all part of the Great Game. What worked last time may not work this time or the next time and real thinking is a matter of concentration and a very dynamic process.

"We are not interested in the possibilities of defeat."

-Queen Victoria

• My posts will brief and to the point today.

I have a day filled with three meetings regarding a new long idea I am working on, visiting with management, one of the company's competitors and a customer between 11:00 a.m. EDT and 2:00 p.m. EDT and then at 3:00 p.m. EDT to 5:00 p.m. EDT, so my posts will brief and to the point today.

• Here is his morning commentary.

The gospel according to Peter Boockvar:

China is back in the news with weaker than expected data. M2 money supply in March rose 12.1%, the slowest pace of gain on record (dating back to 1996), below the estimate of 13% and well below the average since 1996 of 17.4%. In response, the Shanghai index fell 1.4% overnight and the Hong Kong China index was lower by 2.1%. The news is also dragging down copper, nickel, aluminum, lead, palladium, zinc, crude and gold. China's total loan volume in March was 2.07T which was above expectations of 1.85T but still down 19% y/o/y. This news comes ahead of retail sales, industrial production, FAI and Q1 GDP tonight. While slower growth in the 2nd largest economy in the world has obvious implications for the rest of us, it is well needed within China to put itself on a healthier, less credit dependent growth path.

Whether it's the strong euro, slowdown in China or Putin's instability, investor expectations in April for the German economy over the next 6 months as measured by the ZEW fell to 43.2 from 46.6 to an 8 month low. It was about 2 pts below expectations but in complete contrast, the current conditions component rose 8.2 pts to the highest since July '11. As the DAX historically responds to the outlook component, its down on the day as a result in addition to responding to the China news. In the UK, consumer prices moderated to 1.6% y/o/y in March, the slowest rate of gain since October '09 but it doesn't include the persistent rise in home prices where gains of 9.1% y/o/y in February were seen, the most since June 2010 and above the estimate of up 7.4%. Specifically in London, prices were up by 17.7%, the most since before the crisis hit in 2007. Nothing like easy money, AGAIN.

In the US today, outside of earnings, watch the CPI figure where expectations are only up .1% for both headline and core. Last week we saw import prices, PPI and worker compensation data within the NFIB index that were all higher than expected at the same time the CRB index closed yesterday at the highest level since October '12. If there is a major consensus out there, particularly at central banks and the IMF, it is that there is no inflation out there. Take the other side and be long commodities.

• A potentially actionable Yahoo! upgrade.

Macquarie has upgraded Yahoo! (YHOO) to Buy this morning, raising the price target to $40.

"The Bottom Line ¿

Given the 17% pull back in shares since hitting their recent high of $40.15 on March 5 (vs. 3% for S&P 500), we believe that investors should buy YHOO ahead of the expected upcoming Alibaba IPO. Our target does not anticipate improvement in the core business but our new valuation of Alibaba at $160-$180bn combined with the recent pullback offers investors an attractive entry point. At this Alibaba est. valuation, combined with the 35% stake in YHOO Japan, YHOO's Asia assets represent $28.76/per share in value (adj. for a 38% tax). Combined with $4.2bn in net cash and a 5x multiple on our '14E EBITDA of $1.36bn yields a target price of $40. Additionally, while we have always been cautious regarding the many tax efficient structures that have been floated by various interested parties, post-IPO, more tax-efficient possibilities are possible (though still not built into our valuation given the fact that previous tax proposals have not worked). Key positives:

1) New Alibaba valuation of $160-$180bn via Jiong Shao (Macquarie's China Internet analyst).

2) Alibaba IPO coming in months, not years.

3) Tech sell-off creates a buying opportunity.

4) Low expectations for core business.

What could go wrong? We have four key concerns:

1) Alibaba could price at a valuation lower than expected.

2) YHOO could use the Alibaba proceeds in a non-shareholder friendly manner.

3) A transitioning YHOO shareholder base (from those that own it for Alibaba to more value investors) could cause disruption.

4) YHOO's core could weaken further than expected.

This is clearly a trading call not, in any way, a positive call on YHOO's core fundamentals. We remained concern about near-term trends in both search and display and are rather pessimistic about YHOO's long-term competitive positioning in search, particularly mobile search."

This call could be actionable for a trade.

• The Nikkei is down 14% for 2014, and China's market has weakened considerably.

Overseas equities are mostly trading lower in the major markets, though Japan and Australia are higher. Still, the Nikkei 225 -- which was the hedge fund's and consensus favorite regional stock market going into 2014 -- is now down by 14% year to date.

U.S. futures are up modestly a little after 7 a.m. EDT.

China's stock market has weakened considerably. The proximate cause for the weakness have been the money-supply numbers out of China: M2 growth slowed noticeably and came in up 12.1% vs. the consensus forecast of 13%. This release raised concerns ahead of tonight's China first-quarter real gross domestic product numbers, and its March industrial production and retail sales. In and of itself, the M2 wasn't a biggie, but it has raised fears following the poor March trade data.

U.S. markets closed higher yesterday, but there was a lot of volatility during the day and volume was weak. A lot of the panicky de-risking appears to have taken place, but there is an overall hesitancy, volatility and lack of commitment, as evidenced by the low liquidity.

J.P. Morgan reports: "Despite the M2 miss, the PBOC [People's Bank of China] moved forward with a big liquidity drain from money markets (signaling that officials still aren't ready to adopt material stimulus measures); money market rates largely fell despite the liquidity withdrawal."  

Besides the China developments, there was little in the way of overnight news.