Silly rumors...tricks are for kids!
It's a new day in Minyanville and traders have begun the daily process of reading the tea leaves. There are two questions on everybody's lips. One, was yesterday's pullback was an ominous sign or a healthy pullback? Two, and perhaps more pressing, what the heck was the answer to yesterday's trivia question?
The jury's still out on the first question and, while I continue to sense that selling rallies is the money trade, we must always allow for a margin of error. Again, I'm bearish, but I'm looking to play it via downside paper. I'm choosing this method for a few reasons: I understand the potential for a self-fulfilling blow-off top (if we break out), vols are cheaper than they've been in a while and it enables me to use (higher) prices to my advantage (while defining my risk).
The Saddam rumors (exile) are making the rounds again and that's given a pop to the tape. Still, the semis, storage, internet names and, to a degree, telecom aren't participating as they should. On the other side of the coin, the cyclicals, biotechs, and energy have an early bid.
I'm very temped to put an arm into my bear costume (to make 75%) but I'm going to exercise discipline. For the record, I don't believe the rumors and if that's why the market is rallying, it's my (humble) opinion that it should be faded. In the meantime, let's up the ante on the trivia question: how many countries currently have Minyanville citizens? Everybody has ONE (more) guess and the winner will get a free Minyanville fleece! Send your responses to email@example.com.
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