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Hoofy the Hillclimber

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I have climbed highest mountain
I have run through the fields
Only to be with you
Only to be with you

(U2)

Thataboy Hoofs, Daisy is surely waiting for you with open arms...she's good like that. However, before you pop the champagne, I would remind you that there are many hours left in this session. It's O.K to be bullish...but it's always necessary to be disciplined. If this tape has taught us anything, it's to expect the unexpected and not get cocky.

In the interest of viewing our big picture as a series of little pictures, we now cast our eye towards S&P 810 and NDX 850 as upside resistance levels. The tape surely acts jiggy, but I've always found "in betweens" to be an effective method of trading. In other words, if I bought 100,000 shares of Raiders Inc, I may sell a partial amount into this rip. How much? Well, that depends on your view of the tape and your individual risk profile.

Yesterday we spoke about trading style and the necessity of identifying whether you're a "forest" player or a "tree" player. Personally, I'm so close to the action that we may need to take the analogy one step further. Let's say, for purposes of this discussion, that I live in the bunny hole (very active trader). When my view warrants it, sometimes I'll step out of that bunny hole, open up my stance (risk profile) and give my positions a little "room." My point? You can always adapt your style to the field position of the tape. It's what we do.

The S&P breadth has turned (marginally) positive and, as that's been the biggest thorn in the side of this tape, this is a constructive sign. Continue to monitor this as it'll be a "tell" if it starts to fail. The banks (BKX), meanwhile, are tacking on a 4% gain right in the face of those panicked "bid wanted" (corporate paper) players this morning. While they "may" eventually be proven right (before this bear is all said and done, I think they will), this is another example of how emotional decisions are typically costly. Timing is, indeed, everything.

The Nazz continues to outperform and, consistent with the fakakta mindset of the masses, the buyers have come alive at higher levels. The question on everybody's mind is: Is this move sustainable or is the Minx just sucking the buyers in before cruel reality sets in? I've shared my thoughts with you, but I would also stress that we don't need to make that decision just yet. Take our journey one step at a time, listen to what the market "tells" us, factor all scenarios into your risk profile and trade within your means.

I've got a lunch meeting at noon and my posts may lag for a bit, so thanks in advance for understanding. I hope this finds you having a prosperous day, mon frere.

R.P

Long QQQ calls


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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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