Snapper the turkey is gonna get stuffed!
Is this the real life? Is this just fantasy?
Caught in a landslide, no escape from reality.
Open your eyes, Look up to the skies and see
The afternoon session is creeping right along and traders are actively scanning for signs of Snapper. Tapes that lurk, as this one seems to be doing, typically give pause to the pressing bears. After the spanking they've recently received, they're quick to cover up and take what they can get. That's generally why cusps tend to be "processes" at trading tops as opposed to "points" at bottoms.
I've always like to break trading moves down into three categories: denial, migration and panic. My current dilemma, and I think it sums up my thought process, is where we're currently dancing. Either this is the migration portion of a beg leg or the panic portion of a bull leg--I haven't quite figured it out. The former implies that we've already begun the turn while the latter means that we've got to exhaust the upside first. Which is it? Tell me what IBM and MSFT say, cookie, and I'll tell you for sure!
In all seriousness, both of those scenerios will lead to lower prices (in my mind's eye) but will take two entirely different paths to get there. As such, my preferred methodology is to pick my spots on the short side and define my risk. This way, if we've yet to see the panic, I can either leg into some gamma (if I anticipate a rally) and/or define my risk. Generally, when I'm setting these types of trades up, I like to look at the out month (Feb or March). FYI.
As I write, I'm seeing macros try to stir the pot by lifting the sell-side on Nazz futures and SPY's. If they can get it going, all bets are off but if they get stuffed, Mon Frere, the selling may be exacerbated into the close. Fun stuff, eh? In the meantime, watch S&P 915-922 as a trading zone as we ready ourselves for YHOO! and QLGC results (tonight).
In Minyanville news, please note that you'll no longer be able to copy/paste the Gazette articles. While I know many of you like to pass along our content, we'd much prefer if you'd have your buddies sign up. We've put a lot of work into making our village as inclusive as possible and, trust me, we have benevolent intentions. A'ight?
We've yet to declare a winner in today's trivia contest. How many countries currently have Minyans residing in them? Send your (one) guess to firstname.lastname@example.org, baby--we're itchin' to give away that free tee!
More importantly, I want to jump ahead of the curve and be the first to wish Jonathan Herman a happy birthday (I know it's tomorrow). Remember, Herm, there's a lot of things on this earth that are really cool, but sharing a cold brew with your brother probably tops the list. Do me a favor---when you're with Russell and toasting a cold Bud, give a wink upstairs to Bill. He's surely smiling down on us all.
Have a peaceful night.
Daily Recap Newsletter