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Hook 'em Horns!

By

My Hero!

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Well I ain't never right but I never been wrong
As everything works out the way it does in this song
Cause once in a while you get shown in the light
In the strangest of places if you look at it right


(The Grateful Dead)

Neil Glassman, one of the classiest guys I know, was quick to tell me that Buddy Holly (not the Stones) first penned "Not Fade Away" in my last post. I would normally argue the point with my follicly challenged friend but, as he actually grew up with Buddy in the 50's, I'll give him the benefit of the doubt. I now owe him dinner...which should set my back $3.99 at the 4:30 dinner seating at his club! Oy!

Speaking of early birds, I promised myself that I would count to 100 (backwards by primes) this morning before initiating risk. The fade trade made (makes) sense, in my mind's eye, as the bipolar ambition crew flipped from cheers to jeers in a heartbeat. The trick--and I think this is very important--is to factor field position into the mix.

This is the fifth straight day that the S&P is lower and critical levels are rarely breached from oversold (overbought) conditions (see BKX 800). I have obvious concerns from 40,000 feet and, ultimately, I think these levels are dust in the wind, dude. However, as we focus on the journey rather than the destination, I'm happy with Hoofy as long as my risk is defined.

The problem, thus far, is that the internals can't turn the corner (been a tremendous intraday indicator) and the financials continue to take it on the chin. Once again, and consistent with yesterday's theme, the N's are outperforming the S's and, if the tape turns higher, that complex is likely to lead. Neil (feeling confident now) points out that there's not much fear in the street and I don't disagree. My sense, however, is that the complacency is more of a problem for the broader trend (and not the nuance where I currently live).

The earnings last night did nothing to change the fundamental backdrop (in my humble opinion) but, as we know, it's a numbers game. Wall Street's expectations were lowered to levels that were "attainable" and, as these companies met reduced forecasts, everybody cheered. That's kind of like saying I want to get my weight down to 200, I can do it, but I'm only really fooling myself-and I'm still fat at the end of the day!

And so it goes...I continue to hop around with one leg in my Collier Diamond C Ranch quality bull costume (25% conviction on the long side) and, if I see any jig in the today's trading tells (or we get closer to the drop zone), I may add another. Either way, and this is the critical element, I'm going to adhere to a strict stop if "my" level is broken. According to Tom Dorsey and the rest of his saucy crew, the break "confirms" at S&P 865...so you know.

Hope this finds you well, cookmo.

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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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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