The Love Boat
May peace be with you!
It was later than I thought
when I first believed you
now I cannot share your laughter
Ship of Fools
Well Minyans, it's getting to be about that time. The critters are packed, Boo's sporting some Bermuda shorts and Sammy's psyched for the early bird special. While I'll be actively monitoring the Minx the rest of the session (and Monday), my Minyanabilities will be hampered while I'm out of town. As such, this will be my final post until Tuesday. Stop crying Fokker...I'll be back soon!
A few quick observations before I scoot. First of all, the potential for outsized volatility exists as we creep closer to month (and, in many cases, year) end. It "feels" as if the bulls wanna sport some acne but, just like yesterday, the wildcard is how the fast money is set up. If they're trapped long and the breakout doesn't evolve, you could see 'em all head for the exits at the same time. If the "real money" shows up and tries to end their month (years) on a high note, it could get wiggy the other way.
Watch the brokers, breadth and semis for clues to the fuse. As it stands, we're still in churn mode (bearish) but I see the underlying bid just as you do. I'm still honoring the Burned Razor, mind you, but have constructed a risk profile that "kicks in" if we reverse lower (rather than sets a strict line in the sand). I know that the long gamma trade (owning option premium) has been a loser this year but with the VIX at 15ish (WOW!), it's more compelling, not less.
With regard to the semis, a Minyan just asked me why I thought that this was a simple and healthy pause. If that's how I was interpreted, allow me to clarify. After the run they've seen, the first (and second) respite is being viewed (by the trading community) as a simple step back before the next leap forward. I'm not on board that thesis, I just respect that it's "out there." Personally, I think that these names are better sales (particularly the semicaps) but the cult following and crowded short base makes it a tricky fade.
Next week will host a handful of economic reports and a showdown with Butch Cassidy. The Cisco Kid (CSCO:NASD) reports Wednesday and rest assured, Chambo will color investor psychology. It'll also offer the tape grist as we unwind this technical twist. It seems as if everyone has itchy trigger fingers these days and they're awaiting directive for the next leg. Identify a suitable horizon, don't overextend your risk profile and make lucid decisions so you can relax this weekend.
I'm off like a prom dress so lemme wish you all a happy, healthy and safe Halloween. This is what it's all about, so make sure you don't spend the weekend worrying. That, my friends, would be a true waste of time.
Fare ye well.
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