Seeing is Believing
I met a devil woman
She took my heart away
She said I had it comin' to me
But I wanted it that way
The afternoon flow has reached a plateau and the ticks are flickering pretty slow. That, of course, begs the obvious question: Who the heck cares about the Rosie O'Donnell case? Oops, wrong question. The real question is whether Snapper peeks his beak out and sneaks in a little face time. That's an entirely more interesting topic for discussion...although that's not saying much.
Despite the crimson tide, the pullback (thus far) feels corrective (rather than impulsive). Bad breadth and lousy leadership aside, the orderly nature of the selling triggers two thoughts in my crowded keppe. The first is that Hoofy will prolly wanna try the upside and see what the bears got at initial resistance. The second is that complacency is still the dominating emotion in the marketplace (which is ultimately bearish). How we get thar from here (and the oompha of the rally attempt) will help define where we stand in inflection land.
While I have strong inclinations as to the ultimate fate of our state, we must respect the power of pressy tapes. I've made some covers (discipline) into the slippage (post Friday) but am content to "trade around" a long gamma book (with a negative bias). The (still) cheap volatility levels allow me to define my risk (out to December/January, with a smattering of front month paper). I still wanna sell rallies, shockingly enough, but there's a subtle (yet important) distinction between fading and pressing.
Could they rip 'em to new highs without looking back? This is the Minx, my friends--she can do anything she wants. Still, the conditional elements (we've discussed) are offering Boo his best shot at sloppy seconds. That doesn't mean it starts right here, right now, but it's something to acknowledge when establishing a risk profile and stylistic approach. A'ight?
Good luck into the close, Minyans, and fare ye well.
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 firstname.lastname@example.org.
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