Random Thoughts: Will the 2003 Stock Market Analog Play Through?

By Todd Harrison  FEB 21, 2013 11:16 AM

Trading our way through this freakish fray.


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

As we're apt to say in Minyanville, there's a fine line between patience and stubbornness—it's called the bottom line. 

Over the last 22 years of trading, I've been wrong plenty.  There were BIG losses (after I flipped a massive position from long to short), times when I swung at a pitch outside my strike zone (while feeling emboldened) and of course, plenty of "par for the course" losses (if there was no risk, it would be called "winning," not "trading"). 

Wednesday afternoon, after a two-week argument with the stock market, I stopped myself out on my S&P (INDEXSP:.INX) short-side bet; it was perhaps the most frustrating 10-handle loss I’ve ever experienced as I got dinged directionally and my chosen vehicles—April puts—dripped decay each and every day. 

Discipline over conviction, I told myself as I bit my lip; the mechanics of the swing always trump the results of the at-bat.

Yesterday morning, I awoke early, raced to the office and as soon as the stock market opened, I slapped the position on anew—with May paper—and reminded myself to “trade to win; never trade, 'not to lose.'"

This time, in a reversal of fortune, the market agreed with me to the tune of 30 S&P handles in 24 hours (note: I covered half my risk into the close yesterday and nibbled anew this morning at S&P 1500.)

Time and price are the arbiters of variant financial views and that’s playing out in real-time as we speak.  If you take a needle away from an addict, they’ll go through withdrawal.  Yesterday, the market experienced “anticipatory withdrawal” as the FOMC minutes demonstrated dissention in the ranks. 

As we’ve written for many years, credit of a different breed—that of credibility—will be the issue at hand for markets.  Only time will tell if the market will finally call the Fed’s bluff. 

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

Random Thoughts:

Disclosure: Minyanville has a business relationship with BBRY.

Twitter: @todd_harrison

No positions in stocks mentioned.

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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