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The Pebble and the Pond


There is a road, no simple highway
Between the dawn and the dark of night
And if you go, no one may follow
That path is for your steps alone.

(The Grateful Dead)

A little perspective from above as we wade through today's contra-hour and prepare ourselves for the closing flurry. It's easy to get caught up in the flickering ticks-particularly on days like this-but perspective is always helpful as we find our way. If you're putting an insane amount of pressure on yourself and microfocusing on every tick, you're doing more damage than good. At a point, staring at the screen is counterproductive and wasted energy. Release your grip on the handlebars a bit and take a deep breath-there's more than one way to skin a profit.

While Minyanville was created as an open forum of education, our goal is to provide value to all readers at some level. Due to the diverse nature of our audience, this is easier said than done! Your fellow Minyans are students and teachers, hedge fund managers and individuals, young people and retirees. In short, there is no blanket approach that's appropriate to communicate-each of you has a distinct situation and your risk profile should reflect that individuality. For some, a bearish posture may dictate simply waiting before committing more capital. Others are using this rally as an opportunity to scale into aggressive short positions. My point is, I will continue to communicate my honest views but in no way am I advocating that you tag along. Creating a comfortable path is the first step to a profitable journey and you must choose your own steps.

In my seat, there are a couple of ways to have approached this juncture. I would be rationalizing if I attempted to tell you that it's ok to miss a move but let me ask you this: If, hypothetically, we put in a new low before year end, was fading this rally the wrong way to play it? Surely you missed some incremental performance on the upside but you'll surely make a killing on the reversal lower. Once again, the answer to that question is subjective. The buyers on October 1st were surely licking their wounds for a few days but, if they held on, they're now laughing all the way to the bank. Just some food for thought as we find our way.

As our friends at the United Nations told us earlier, markets that are strong all day typically end that way. Hoofy and his pals will once again point to the strong internals and prevalent psychology but please know that I'm typing lefty- my right hand is firmly up and protecting my punim. I'm quite conscious of the potential for end of day jig, but slow and methodical scale (sales) removes emotion from the process. Tomorrow promises to be a barnburner (as opposed to today), so choose wisely as you craft your overnight risk profile.

Good luck into the close.

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

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