Get out here and fight like a.....turtle!
O' beautiful for spacious skies
But now those skies are threatening
They're beating plowshares into swords
For this tired old man that we elected king
The afternoon drift can't find a lift as Snapper searches for a shift. As discussed in the last post, I made 'some' covers into this drip as a function of discipline. As I nibble on today's turkey club and scan my screens, however, I'm hard pressed to find tangible tortoise tracks. That doesn't mean he can't emerge, mind you, but the longer we stay down, the more likely it is that we'll end near the lows.
My current game plan calls for "trading around" my short bias and fading (read: selling) the next rally attempt towards S&P 1050. Obviously, as with any trading strategy, there are inherent risks associated with that approach (perhaps we won't get the pop or the squeeze will "catch" and ride the tide to the other side). I remain quite grizzly on the big picture and, as such, I'm now forced to straddle the line between disciplined trading (taking some profits) and allowing the market to "work" for me (patience). That's typically the most subjective aspect in an individual approach and is unique to each of us.
Looking at the video tape, the breadth remains the biggest thorn in Hoofy's side. It hasn't mustered a bounce all session and that's generally a pretty good tell. The brokers act alright, relatively, but it's important to remember that they got jack hammered on Friday. As such, relative outperformance shouldn't be a shocker (despite the continued headlines). The other leading tells are lower (particularly the internets) but I, for one, wanna see how the semis respond when they fill the gap.
We've seen some put buying in Flow's Diner and with the VIX up 10%, it appears as if some fear is starting to creep back into the tape. Remember though, this is barely the second dip and complacency continues to be the dominant theme in the street. We could see bounces (perhaps violent ones) but I still think the risk is to the downside. As always, just one trader's humble opinion.
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 email@example.com.
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