Finding Nemo in a Stock Market Snowstorm

By Todd Harrison  FEB 08, 2013 11:33 AM

It's a Freaky Friday on the East Coast.

 


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

I couldn't resist the title—but it's a bit misleading as Nemo, it would appear, has found us!

It's déjà vu all over again on Long Island as gas lines wrap around the block and folks batten down the hatches. I awoke to a blanket of white—and the hard stuff isn't supposed to hit until later tonight. I remember how awesome days like this were as a kid; as a homeowner still clearing debris from Sandy well, not so much!

In other news…

Over the past few days, we laid out several missives on The Three Things Bears Need to See and what Three Very Smart Bears Do Foresee -- A Stock Slide.

Indeed, the confluence of lenses in the latter matter—the inter-market trends, spooky cycles in the market, and the disconnect between perception and reality—are valid and intelligent takes on the tape. Factor in the length of this "buying stampede," as highlighted by the savvy seer Jeff Saut, and you had the makings of a sloppy session yesterday.

I tapped the tape myself—laying out some Goldman (NYSE:GS) into the opening pop and layering into some S&P (INDEXSP:.INX) puts on the retest of the flat-line during yesterday's contra-hour. Alas, toward the end of the session, while whispering "discipline over conviction" to myself, I shared the following thought in real-time on the Buzz (click here for a free trial):

Try as I may, try as I might, I can't convince myself that holding short exposure overnight is anything more than a coin toss. Through objective eyes, the bears had the bulls on the ropes today but they couldn't deliver the knockout punch...again. As soon as I post this Buzz, I'm gonna cover up my Goldman and S&P short. And I'll sleep like a baby tonight, which is to say I'll wake up every few hours crying.

We often write that good traders know how to make money and great traders know how to take a loss. I'm far from a great trader—and yesterday wasn't a loss, it was a push—but the discipline paid off, if only for the ability to have a better entry points on those trades, or to move on to new trades altogether.  Yes, sometimes you can learn a lot just by watching, and yesterday afternoon, it was clear that the bulls had some swagger left in their step.

The trade that got away yesterday?  My cannabis proxies, which I tried to buy back after punting them into the froth last week.  They are evidently on all sorts of restricted lists these days—likely for good reason, but nonetheless frustrating as they are ripping higher today.  I try not to look back—profits reside in the ride ahead—but for those involved in the space, your P&L is looking high and higher today.

Random Thoughts:
R.P.

Full disclosure: Minyanville has as a corporate relationship with BBRY.

Twitter: @todd_harrison

Position in spx, corporate relationship with BBRY

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 todd@minyanville.com.

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