May peace be with you!
"I just don't think I can continue to live in a place that embraces and nurtures apathy as if it was virtue."
--William Sumerset, Se7en
The Hump is a grump as we edge through the day and I struggle with something insightful to say. There's only so many times you can note the jiggy action in Citi (C:NYSE), the November lows for the semis (SOX 404), the 50-day moving average in the dollar index (82.65) or the abject apathy across the board. Indeed, with sentiment surveys at the highest level since '87 and vols barely holding onto teen status, folks have gotten bored talking about how boring it is!
In one fell swoop, Boo has wrestled the baton away from the bulls and earned the benefit of the doubt. It would be much easier to view the last two sessions as an aberration if the breadth wasn't so damn drekky. The back nine of 2004 was dominated by "rolling rotations" and migrating leadership. In the first three days of the new year, we've seen distribution in equity land and shadows of strength that scattered at will. One week does not a trend make, mind you, but the action is at the opposite end of the health spectrum.
I've spoken to a few bulls who maintain that this is a healthy pause after a nice rally. Could be--more than a few traders placed "seasonal inflows" above "technically extended" on their "what matters" list. With my primary stochastics working their way to the bottom of the page and the short base upticking (long base shaking out), a case can be made that this is incrementally healthy. They are, of course, assuming that the big picture negatives will continue to be shrugged off but that's an argument for another time or lower prices (whichever comes first).
For my part, and just so you know, I missed the short-side trade and haven't pressed or guessed since. I have a handful of positions that are more situational than directional. It's funny--my style used to be much more active and constantly in motion. I'm not sure if the market has changed or I have (both?) but I've learned to appreciate the benefits of not trading. I'd rather win a higher percentage of fewer trades and save myself the stress, aggravation and hair follicles in the process.
Along those lines and before I go, I'll share that I made a pledge to myself in Arizona to carve out one hour each day just to "be." It's easy to get caught up in the frenzy of professional advancement but much more important to be mindful of the moment. The risk to setting goals is that your constant focus is on the destination and by the time you get to where you think you need to be, the journey will already be over. Just something to think about as we glide down the back of the Hump and ready ourselves for the important stuff.
Have a peaceful night.
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 firstname.lastname@example.org.
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