• Bid hit.

I bought the Oaktree (OAK) I had mentioned.

• It's called the bubble in market complacency.

I suppose George Soros is buying this bubble in market complacency

• I am seeing buyers take the offering side of Monitise.

For the first time since my Bar Mitzvah, I am seeing buyers take the offering side of Monitise (MONI.L/MONIF).

Not that I am watching closely!

Thought some would be interested.

• I have scheduled meetings starting at 2:30 p.m. EDT.

A heads up: I will be leaving at around 2:30 p.m. EDT for the rest of the day to meet two new managements of companies that I have been researching over the past month.

• Waiting for a good timing point.

After today's trading, I am essentially back to market-neutral, waiting for a good timing point to reload on the short side.

• Here are his musings at midday.

Midday musings from Sir Arthur Cashin (it looks like deja vu all over again):

Reminiscent of yesterday, the opening rally consolidated just below the new S&P resistance 1979/1983. In early afternoon, they engaged as it also looks today.

Run rate also similar at 12:30, projecting 550/630 close. Bulls would prefer that ten year close below 2.40%

• My price is $49.25.

I am bidding $49.25 for more Oaktree (OAK) now.

• I am adding three closed-end municipal bond funds to my Best Ideas list.

In light of the continued low level of interest rates, I am adding Invesco Trust for Investment Grade Municipals (VGM), Invesco California Value Municipal Income Trust (VCV) and Nuveen Premium Income Municipal Fund (NPI), three closed-end municipal bond funds, to my Best Ideas list.

• At $24.75.

I am offering more Cisco (CSCO) short at $24.75.

• Namely, Lowe's, Home Depot and Berkshire Hathaway.

I have been stopped out of my Lowe's (LOW) and Home Depot (HD) shorts (which were taken for technical reasons) and on my Berkshire Hathaway (BRK.B) short (funadmentals/valuation).

I am taking all three names off my Best Ideas list.

• Rumor has it.

High above the Alps my gnome is hearing that David Einhorn's Greenlight has shorted LinkedIn (LNKD).

I have no clue if this rumor is accurate.

• Here are his musings this morning.

Morning musings from Sir Arthur Cashin:

Stocks float below next S&P resistance 1979/1983. Run rate appears to be on a par with Monday but will calculate a bit later.

Slight shift in assets as gold, oil and bonds were higher pre-opening but have slipped back in first hour of trading, hinting a slight decrease in political risk profile.

• The potential is there.

I added to my Citigroup (C) long on a potential upside breakout.

• Here is his commentary.

Sir Mark J. Grant on Europe's next magic trick:

Mr. Draghi has been driving the ECB with promises of intervention and little else other than those promises. Words, words and words. On his left hand side there has been the weaker nations calling for help while on his right hand there is the German fire engine travelling at a decent pace.

In front of him there are the galloping PIGS which are the same size as the stronger countries now as France and Italy dart back and forth between the camps.

Behind Mr. Draghi there is a Russian helicopter flying at ground level which Mr. Putin claims does not exist.

Both the PIGS and the fire engine are travelling at the same speed.

What must Mr. Draghi do to safely get out of this highly dangerous situation?

Stand up, do something, and get off the merry-go-round!

With the German 10 year at 0.99% this morning and the French 10 year at 1.40% the lower interest rate card has been played. It may be the only thing that has held Europe together during the last six months as inflation tanked and growth sputtered to right off a standstill. Even more telling may be the two year sector. America at 0.42%, France at 1/10th of its American counterpart at 0.04% and Germany at -0.01% according to data supplied by Bloomberg. There is just nowhere left to go here.

Soon, in my opinion, and rising over the objections of the Germans, the ECB will start some type of Quantitative Easing. France and Italy have already balked and effectively dismissed any austerity measures and pushing is coming to shoving. It takes place behind closed doors and little is said in the Press but Italy and France have told Berlin to take a hike and the Germans can't do much about it. With debt rising and productivity falling and political solutions, once again, drenched in mud, the ECB will act. I think we are quite close to the curtain coming up on this new scene now.

"The Church says that the Earth is flat, but I know that it is round. For I have seen the shadow on the moon and I have more faith in the Shadow than in the Church."

-Ferdinand Magellan

The hypocrisy in Europe has dragged on. The debt to GDP ratios that have been make-believe stories as fantasized by their methodology of what is to be counted and how. The inclusion of drug trafficking and prostitution in their economic numbers. Losses counted as investments and property values the stuff of a Grimm fairytale. On and on it has gone but the truth always shows up eventually as Time drags us all forward and beats up the path.

The Russian sanctions and their economics are but a footnote for America. However they are a line item for Europe. On top of increasing debt, admitted or not, almost no growth and declining revenues you now can throw the costs of dealing with Russia into the mix. Some type of QE will certainly weaken the Euro and I am sure, since the Europeans want this, that this is an argument bandied about in Brussels.

Watch Mr. Draghi. The black hat is on the table, his hands are whirling about and soon we will witness his latest magic trick.

"I confess that Magic teacheth many superfluous things, and curious prodigies for ostentation; leave them as empty things, yet be not ignorant of their causes. But those things which are for the profit of men -- for the turning away of evil events, for the destroying of sorceries, for the curing of diseases, for the exterminating of phantasms, for the preserving of life, honor, or fortune -- may be done without offense to God or injury to religion, because they are, as profitable, so necessary."

-Agrippa

Necessary is upon Europe once again!

• Run, don't walk, to read 'Buy Bubbles, Bet Big and Backache -- Soros's Secrets' in The Irish Times.

I am publishing this Irish Times article on George Soros in its entirety, as it holds numerous lessons that will not be taught to you in business school or told to you by your fianncial planners:

George Soros is 84 today. His career is remarkable both for its longevity and its returns ¿ his Quantum fund has generated $39.6 billion in profits over the last four decades, making Soros the most successful hedge fund manager in history.

How has Soros managed to stay at the top for so long? What are the secrets to his success? Can investors learn from his methods? Or is Soros a one-off, a gifted speculator with an inimitable knack for timing?

Short selling

Never dependent on rising markets, Soros has long been a skilled exponent of short selling, where traders profit by betting on market declines. Although most equity markets went nowhere in the 1970s, Soros's market-neutral trades helped fuel returns of more than 4,000 per cent during that difficult decade.

His most famous bet was in September 1992, when Soros's shorting of sterling forced the Bank of England to devalue the currency and leave the European Exchange Rate Mechanism (ERM).

That trade earned Soros an estimated £1 billion and ensured he will forever be remembered as the man who "broke" the Bank of England.

Alarmed by the deteriorating global economy, he netted returns of 32 per cent after coming out of retirement in 2007 and even profited amid the chaos of 2008, a disastrous year for most investors.

Last year, Soros's main fund earned an estimated $1 billion by shorting the Japanese yen.

Cautious contrarianism

Soros's willingness to bet against the consensus means he is often considered a contrarian. Indeed, he has even spoken of the "joy of going against the herd".

However, he admits to being "very cautious" about doing so, saying one is "liable to be trampled on". The trend is your friend most of the time, he writes in Soros on Soros. "Trend followers only get hurt at inflection points, where the trend changes".

Buy bubbles

Not only does Soros caution against battling the herd, he sometimes likes to join it, even if it means jumping on to an economically unjustifiable trend.

"When I see a bubble forming, I rush in to buy, adding fuel to the fire," he said in 2009. "That is not irrational."

One such example is gold, which he described as the "ultimate asset bubble" in early 2010. Gold had soared 40 per cent the previous year and many commentators took his words to mean he believed the precious metal was set to fall.

However, Soros was actually buying gold, which was then trading at abouat $1,200, the reasoning being that buying into bubbles can be very profitable, if one gets out in time.

Soros did just that, selling most of his holdings in early 2011, some six months before the bubble burst after prices topped out above $1,900.

Reflexivity

Soros does not believe in the idea of efficient markets driven by rational investors, instead arguing for the "twin pillars of fallibility and reflexivity".

Markets can influence the events they anticipate, he says. One cannot truly separate market sentiment and economic fundamentals, as the former can actually shape and change the latter. Bullish sentiment may cause prices to rise, and rising prices in turn create a wealth effect, affecting consumer spending.

In a negative environment, the reverse applies. Investors' views influence events, and events influence investors' views.

There is, he says, a "two-way reflexive connection between perception and reality which can give rise to initially self-reinforcing but eventually self-defeating boom-bust processes, or bubbles".

Animal instincts

According to his son, Robert, Soros's trading was always influenced by more than reflexivity. "My father will sit down and give you theories to explain why he does this or that", he once said, "but I remember seeing it as a kid and thinking, 'Jesus Christ, at least half of this is bull[xxxx]'.

"I mean, you know [that] the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm and it's this early warning sign."

Soros snr has admitted to relying greatly on "animal instincts", saying the onset of acute pain was often "a signal that there was something wrong in my portfolio".

His decisions, then, "are really made using a combination of theory and instinct".

Bet big

Stanley Druckenmiller, who managed money for Soros in the 1990s, came up with the idea of shorting sterling in 1992, but Soros disagreed with the suggestion that he steadily build the position. If the odds really were in your favour, said Soros, you must bet big, and "go for the jugular".

"I learned many things from him," said Druckenmiller, "but perhaps the most significant is that it's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."

He added: "It takes courage to be a pig. It takes courage to ride a profit with huge leverage. As far as Soros is concerned, when you're right on something, you can't own enough."

Acknowledge your mistakes

"I'm only rich because I know when I'm wrong," Soros said in 2008, saying he had "survived by recognising my mistakes".

There have been a few. Soros took a hammering during Black Monday in 1987, lost billions in Russia in 1998, took a pounding during the dotcom blow-up in March 2000, and paid $54 for Bear Stearns shares in March 2008, just days before the firm was sold for $2 a share.

Far from being mentally crushed, Soros swiftly bounced back in all cases.

"He doesn't care whether he wins or loses on a trade," said Druckenmiller, who described him as "the best loss-taker I've ever seen", someone who "can easily walk away from the position".

His philosophical beliefs undoubtedly aid Soros in this regard. "To others, being wrong is a source of shame; to me, recognising my mistakes is a source of pride. Once we realise that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes."

Inimitable

While investors who follow Warren Buffett's value-driven and long-term approach are likely to do just fine, it's likely that ordinary investors who attempt to ape Soros's methods will end up in the poorhouse. Buying bubbles, short selling, nipping in and out of markets, going with your gut, betting the farm ¿ it's not exactly conventional advice.

Intellectually and emotionally flexible, someone who honed his timing over a lifetime in the markets, Soros is the supreme speculator. He once asked Byron Wien, an investment strategist and friend, why he went to work every day. Why not work on the days when it makes sense to do so, he asked, when there is something special to be done?

Wien replied: "George, one of the differences between you and me is you know when those days are and I don't."

• Run, don't walk, to read 'Tax Burden in U.S. Not as Heavy as It Looks, Report Says' by Andrew Ross Sorkin.

In today's New York Times Andrew Ross Sorkin points out that the corporate tax burden of U.S.-based corporations is not as heavy as it looks.

The notion that U.S. effective corporate tax rates are not as punitive as the statutory tax rates suggest has been a consistent theme of mine.

• At $98.30.

I am reestablishing my PowerShares QQQ (QQQ) short in premarket trading, a scale starting at $98.30.

• Where it began.

The rundown:

• U.S. futures are building off the gains of Friday and Monday. (S&P futures are up by 3 handles, and Nasdaq futures are 8 handles higher.)
• European stocks are strong, with gains of about 1% after Monday's climb of nearly 1%.
• Nikkei is up 0.83%. Quiet night for news. The Japanese yen is flat after falling 0.21% on Monday. All major sectors advanced, with financials, telecom and energy outperforming. SkyMark Airlines climbed up by 28% amid chatter that it could receive a bid from AirAsia (although AirAsia denied this). Pioneer, Nisshin Steel, Pacific Metals, Daikin Industries, Tokuyama, Kansai Electric and Mitsubishi Heavy all led the Nikkei higher. Daikin was upgraded at Credit Suisse, while Kansai rose on reports that it will apply for a rate increase. On the downside was Chugai Pharma, after big gains on Monday.
• China is up 0.26%.  Again no news. Energy, consumer and tech were higher, while financials and utilities lagged.
•  Little foreign-exchange volatility this morning: The U.S. dollar is up 0.13%, and the euro is lower by 0.11%.
• Gold is up $2 an ounce, and crude is up $0.34 a barrel. Copper prices are up 0.25%.
• The yield on the 10-year U.S. note is down by 2 basis points, to 2.37%. Sovereign debt yields are flat.

Global stocks are extending gains from Friday and Monday. Easing geopolitical tensions, monetary calm and shorts offside seem to be reasons.

U.S. focus will be on the housing starts, building permits and CPI for July (all at 8:30 a.m. EDT). Earnings reports at The TJX Companies (TJX), Medtronic (MDT), Dick's Sporting Goods (DKS) and Home Depot (HD, positve with U.S. comps up 6.4%) highlight the premarket.

On Friday's whoosh lower I covered all my index shorts. I reestablished my ProShares UltraShort QQQ (QID) on Friday and added small yesterday.

I have a low gross and net exposure this morning.