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Se7enth Heaven

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Detective William Somerset and Detective David Mills swung by to remind us that the se7en deadly sins of trading are gluttony, greed, sloth, envy, wrath, pride and lust. Good morning fellas and thanks for stopping by our humble little town. From the look on your faces, it's clear that you think Boo is guilty of some of these sins as he continues to trade around a short bias. Before you convict our furry friend, however, perhaps an investigation is in order to see what his motivation is.

After the slippage we've witnessed the last three sessions, this upside attempt was intuitive as Hoofy was bound to make a stand. As we discussed this morning, there were (are) potentially a few ways to approach that action. We could have flipped around to the buyside and traded the lift (granular) or we could have covered a bunch of shorts into yesterday's decline (we did) and use this strength as an opportunity to reestablish some short side exposure. How you approach the tape is completely subjective and a function of your risk profile and time horizon. The only right answer, naturally, is the one that makes you money.

Heading into our lunchtime Sushi print, the tone of the tape remains constructive with the financials and semi's setting the tone. That said, the recent seeds have understandably shaken the conviction of the bulls while emboldening the bears. Yes, this can be viewed as bullish-but with several technical levels recently being breached, my inclination is to stick with Boo and lean against S&P 900 (past support, current resistance).

Add General Electric to your list of tells as it's been heavy all day. The stock is red in the face of a spirited rally and that typically means there's supply around. As this is one of the few issues that can shift psychology, it warrants a mention.

Other than that, I'm attempting to view prices as an opportunity (rather than a hindrance) while keeping those deadly sins out of my process. Choose your risk wisely, my friends, there are a lot of crazy traders out there. The goal is to use their emotion to your advantage.

Good luck.

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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