The Floyd Void
Standing in the aisle
With itchy feet and fading smile
Can you feel me?
I'm baaaaaaaaaack! No, not the market, silly, that would be the ultimate mush and anybody that knows me knows how superstitious I am. I'm talking food, baby, and last night I had one of those special moments that only happens on rare occasions. There I was, sitting in my office and staring down at a plate full of Ray's pizza. In a slow and deliberate motion, I reached down and picked up my cheesy slice of heaven and took a very cautious bite. Once I realized that my surgically altered mouth was operating effectively, it took me all of two minutes to finish two slices. That's a slice a minute, my friends, and if I had more time (or more pizza), I'd probably still be eating!
Back to life, back in reality, the Nazz futures were just offered "limit down" (when's the last time that happened?) and the S&P continues to do work at the 905. For the level watchers among you, S&P 905 represents the trendline from the October lows. I wasn't monitoring that level but a bright guy pointed it out to me and, well, you always want to be aware of what other people are watching-and now you are. I still think S&P 895 is more important but we're cross that bridge if we get to it.
Meanwhile, Hoofy just walked by yawning and it's clear to me that he's viewing this action as a healthy and constructive pullback. You know how I feel about complacency in the marketplace, but I've been warning him for a couple of weeks and I think he's grown immune to it. Hey Hoofs, not for nothing buddy, but you know I've only had your best interests at heart. While I understand that gravity dictated an eventual pullback, please remember that nobody's even gone broke taking a profit. And stop yawning...it's making me tired!
The lunchtime breadth is bordering on halitosis as losers are outpacing winners 2:1 and the downvolume is trumping upvolume 5:1. There is still a ton of time left in the day and, if nothing else, it's clear that traders are very conscious of the prospect of a Snapper. That's what generally happens after a big move...traders tend to be reactive and on their heels. It's entirely too early to tell if this is the start of a psychological sea change but, if it is, the sellers will likely come alive at lower levels. Funny how that happens.
Boo and I have made enough picks (not scratches) into this red mess such that we've done enough (if the tape reverses higher) and left enough (if it continues to melt). I always like to ask myself the question when trading "If they're up 100 or down 100, have we done enough either way?" It's the balance between discipline, conviction, patience and the desire to lock in some profits. There's no "right" answer to these questions, my friends, it's a function of your individual style and view of the tape. To each, their own.
I've gotta jump back into the mix...the funny thing about gamma is that if you turn your head for a second, your risk profile shifts. Hope you're finding your way today.
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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