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Trade like a Stranger

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Well the music's thundering, restless and hot
You shoot glances across the room
And I can't stop wondering just what she's got
Get the feeling I'm gonna find out real soon


(Bobby Weir)

Does anybody else get the sense that there's something in the air? I'm not talking about that funny smell coming from under Bucky's desk (what IS that?), I'm talking tape. The debate has been raging whether this is a new bull or the same 'ol bear and recently, the ursine of the world really haven't had a paw to stand on. Now, with the tape coming in (read: better for sale), the question is begged: Is this another one day wonder ala INTC or is this the beginning of something a bit more...substantial?

The panicky purchases yesterday afternoon coupled with the QQQ put pukage triggered a flag in my mind and, when we saw that, I had asked Boo to come sit by my side. Now, with the market lower, we have a decision to make. Do we take our little trade and go home or do we play for a bigger downside schnitzel? Every trader must answer that for themselves as they will live with the consequences of their actions. My inclination, sitting on my perch, is to give Boo a little room. Here's why:

The overwhelming psychology has shifted from the "fear of losing" to the "fear of missing." Until proven otherwise, selling hope and buying despair has been a money trade. Even if this time "is" different, I sense that some weak hands need to be shaken out on the long side. On the fundamental front, it seems that the common thread among the companies reporting was "limited visibility" and "economic uncertainty," so it doesn't seem as if that metric warrants blind ambition. Finally, my trusty stochastics are about to offer sell signals across most every sector base, and I've found them to be relatively reliable tools.

Again, I am only walking through my thought process with the hopes that you can extract value from what I'm seeing and how I'm reacting to those inputs. This is not advice, it's only information, and I share it with the most benevolent of intentions.

Gotta hop...fare ye well.
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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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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