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From Soup to Nuts!


You could have a big dipper
Going up and down, all around the bends
You can have a bumper car, bumping
This amusement never ends

(Peter Gabriel)

OK, let's recap the last 128 hours: There was talk of a crash as the global equity indices melted in sync, "bid wanted" situations emerged and market participants aggressively sold S&P 775 and Dow 7200, we held where we "had to" and sparked a sharp Snapper, talk of "THE" bottom quickly spread throughout the street, a "long squeeze" emerged as the fear of losing morphed into the fear of missing, traders chased exposure in an effort to capture performance, the S&P rallied 100 handles while the Dow ripped 1000 points(not a typo)...and now we have bad news from techland and stocks are indicated significantly lower! Is it any wonder that between my two partners and I we have one head of hair?

This is an educational platform and a forum to discuss and debate the merits of the market. During the process, I will sometimes offer my (humble) thoughts as we assimilate the crosscurrents and digest the price action. This is not to be confused with financial advice---we don't do that here. Rather, our intent is to communicate information that will allow you to make better decisions for yourself. The goal of this column is one of consistency and humility-and I strive to make those traits constant threads of Minyanville.

That being said, I was admittedly too cautious walking into today's action and my cost was one of opportunity. I often say that, as traders, it's not necessary to play every move, it's only important to have a high win percentage on the moves we choose to play. That's not to say that missing a move doesn't sting-I'd be lying if I said otherwise-but I'm a big boy (literally) and I'll always take responsibility for my decisions. Still, if this bear market has taught us anything, it's the necessity to maintain discipline in the face of temptation. It's kept us in the game this long, and it will continue to serve us in good stead as we trade forward.

Intel and Motorola can only be described as disappointments and the after-hours action is reflecting these downticks. The real test for the tape-and the bulls-will be how the market responds to adversity. The debate whether this was a bullish phase or the beginning of a bullish trend will be defined by the ability of the market to make a higher low. As I've opined (and it's been either early or wrong), these last few sessions have all the markings of a bear market rally: it was a vicious spike, it sucked in fresh money and it significantly altered psychology. The bull will say "hey, 1000 points is a 1000 points" and, you know what? They're right. Still, from a "where do we go from here" perspective, it sometimes helps to step out of the bunny hole, walk through the trees, get in our hot air balloon and view the forest from 40,000 feet.

It's been a long day (in many ways), so I'm gonna start edging my way towards the door and, perhaps, some solid food. You know, there was a time in my life that the angst of "not making more" on days like today would have soured my mood...but not tonight. Perhaps it's a perspective that can only come with true loss, not the transfer of dollars and cents. Don't waste tonight, my friends, tomorrow is just around the corner.

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