Hoofy Keaton, Verbel Boo, Snapper McManus, Sammy Fenster and Daisy Finneran stopped by Minyanville to uncover the mystery of the minx. Hey clan, I know you're schvitzing over the prospects of the tape-but what the cops will never figure out, and what I know now, is that you critters will never break, never lie down, never bend over....for anybody. Before we get fripped---and fripped for real---let's settle down and take a look.
I've received some questions regarding the three phases of a trading move (Denial, Migration, Panic) and I wanted to quickly touch on this subject. We often talk about the "cusps" of the tape as they relate to the bullish and bearish phases within a larger trend. During these cusps, the first "counter-move" (either "up" after a down period or "down" after an up period) is typically met with a great deal of skepticism. For instance, after the prolonged period of selling we've recently encountered, many traders are fading (read: selling) this rally. IF (big if) it sticks and we somehow manage to get some "upside validation" (earnings, economic data, macro "upticks"), the masses will migrate to the "long side" and give the trading move it's next "leg." Finally, if the tape subsequently fails to "come in" (read: come for sale), the fear of missing will create the final leg of the trading move higher.
As Kayser Soze is quick to point out, the beauty of this business is the art of perception. There is a camp out there that firmly believes we're experiencing this trading cycle, but we're currently somewhere in between migration and panic---on the downside. It's akin to having ten people look at a sculpture and seeing ten different things, and why trading is more an art than a science. Just something to think about as traders continue to twist like a pretzel, man.
The tape has managed to trade right to our resistance zone and continues to do work there. Historically, markets that are up all day typically end strong-but in this freak show of an environment we know to keep our right hands up. I will only say that if you're trading emotional and trying to make up for lost ground, you should check yourself at customs and take a deep breath. I mean...how do you shoot this market in the back? What if you miss?
Lucid decisions (please) as we turn our attention to the closing bell. We have a slew of economic releases and a seminal earnings report tomorrow, so show these critters of will what will really is and maintain your discipline. For if you don't, you'll turn around to find your profits---and just like that...theyll be gone.
Good luck into the bell.
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 email@example.com.
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