Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again
The early morning enthusiasm has stalled as the financials banged their keppe at BKX 800 (again) and threw caution to the wind. Consistent with the reactive nature of today's traders, the same accounts that were chasing stocks higher an hour ago are selling them out into the reversal. I've said it before and I'll say it again: if you find yourself getting bullish on upticks and bearish on downticks, do yourself a favor and start stuffing the turkey. Trying to create something out of nothing typically has a way of coming back and biting you in the can.
I did a fair amount reading over the weekend and it's quite evident that the higher prices and recent action is emboldening the bulls. I suppose you can't blame them for being brazen-it's been a long time coming-but I can't shake the sense that this will turn out to be another bitter pill for the bulls. It's my (humble) opinion that the market simply went down too far, too fast, and this rally is the ebb that will invariably accompany the flow. What you must decide, my friends, is whether you want to use the recent strength to lighten up or the coming dips to add exposure.
It's been a rough few years in the market and the natural tendency is to ride it out and attempt to make some money back. If we've learned anything, however, it's that profitability isn't a god given right-it takes a lucid and proactive decision making process. Your decisions will be a function of your unique risk profile and investment horizon and nobody can make that decision for you. Choose wisely and always allow for a margin of error.
Apologies on the lag in posts but we've been having some system issues-which always adds to the fun while managing risk! I think we're all set now but I say that half-hoping and half-sure, so please bear with me as we work it out. In any event, I hope this finds you well and having a profitable journey through today's tape.
I'll be back.
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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