Random Thoughts: Marry Love and Date Stocks

By Todd Harrison  SEP 10, 2012 11:10 AM

Massive catalysts are on tap for the tape.

 


MINYANVILLE ORIGINAL

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

It was a meaningful weekend: After 43 long but not wasted years, I celebrated my wedding on Saturday night.

Despite the tornado warning — which was in a way fitting — the positive energy was palpable as we cut the rug and shared some hugs. We often say, "Work to live; don't live to work," so I would be remiss if I didn't personally thank my beloved for bringing my dreams to life. You are one of a kind, Jamie — you are quite simply the most amazing person I've ever met.

Settling back into the world’s wildest reality show...

We touched on the "Heads I Win, Tails You Lose" jobs report on Friday with an eye toward the massive catalysts that await us this week. The biggies, of course, are the German vote on Wednesday and the FOMC "rate decision" on Thursday — although that's more about QE3 than an incremental rate adjustment (real interest rates are already negative). There is also a Dutch election on Wednesday that isn't getting much press, but it will matter on the margin.

I had a conversation last week about a commodity pundit and the opinion was offered that "he's pretty good, but he dilutes his voice by writing every day." I can relate as I’ve written roughly five times per day since July 2000.  Often times, I was in a zone that benefitted our community; other times, I found myself searching for something to say.  All the while, my P&L served as a tangible manifestation of the accuracy of my opinion.

The trick to that trade — any trade, really — is something I learned long ago, and that's to never let an opinion get in the way of making money; the mechanics of the swing trump the results of the at-bat. I didn't enter 2012 particularly bullish, but I've had a decent year thus far because of my stylistic approach: Trade two-sided, hit-it-to-quit-it, and leave emotions for weddings and funerals.

Over the last month, however, I veered from that discipline; while I had some wins, I fought Google (GOOG) on the short side (which cost me coin) and I currently own some QQQ puts with a stop above NDX 2850 (which was raised from NDX 2800). While I sensed the performance anxiety percolating (as the market worked off the overbought condition as a function of time rather than price), I didn't pay proper respect to the animal spirits.

Trading — much like dieting — is a fluid process; you can trip, but you mustn't fall, and you can’t celebrate the wins or beat yourself up on the losses (although I don't always practice what I preach).  I share this as much for me as I do for you; unless you're a black and emotionless box (which accounts for upwards of 70% of the daily trading volume), you can relate to what I am saying.

There is a fine line between proactive patience and being stubborn — it's called the bottom line. I enter this five-session set with a right-sized tech short, defined risk, and plenty of dry powder.  I respect the power of quarter-end (and yes, year-end) agendas, the (perceived) Apple (AAPL) iPhone5 roll-out reaction, the German vote, the Dutch elections, and QE3 that will shape the forward tape. 

One step at a time as we together find our way.

Random Thoughts:

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R.P.

Twitter: @todd_harrison

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Position in QQQ.