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Holy Macro!


A lot of readers have been asking who the heck these "Macros" are and I wanted to quickly 'splain, Lucy. They're multibillion dollar hedge funds who actively trade all asset classes on a global basis. I suppose you might characterize them as a mutual fund on steroids and they tend to be very aggressive with their bets. I'm sure you've heard of many of them but, out of professional courtesy, I'll stop short of naming names. Suffice to say that when they put on these monster bets, they have a vested interest in making themselves right.

One of the trading tea leaves that helps identify the underlying tenor of the market is the macro flow. During the rippage off the October lows, these guys lifted the tape level after level and sucked fresh money into the self-fulfilling rally. I bring this up now as, for the first time in a while, we've seen some signs of macro selling (and allocation back into bonds) the last couple of sessions. With that said, please know my contacts are telling me that a particularly large macro is long out the kazoo and will attempt to defend S&P 900. I suppose it's intuitive at a point (huge technical inflection point), but I wanted to make sure it's on your radar.

Our day wouldn't be complete without the requisite end of day rally attempt and while I have my thoughts, I'm not going to mush myself now. Suffice to say that I continue to trade around a short bias for the time being and have some powder if Snapper decides to juice the tape.

On a separate topic, I've been hearing a lot of arguments and precedents of why the market should be bought (that happens when your bearish during a rally!) and I will only offer that, on the heels of a bubble, historical measures don't always apply. I mean, do you know how many people chided me for not getting on the Fed train in 2001? My intent is not to champion a good trade (I don't do that), it's simply to offer some perspective during difficult times.

Contra hour comes to a close and I've asked Martin-who's still depressed after getting dumped by Jill last year-to make a Haagen Daaz run and get me some chocolate ice cream. I mean, just because my mouth is fixed doesn't mean that all my meals have to be solid, does it? Outside of a KLAC shareholder meeting and German Industrial production, tomorrow is a quiet day on the catalyst front. Bummer man, I was starting dig the constant digestion of seminal news in a dynamic environment with hundreds of millions at stake. Maybe I'll short some Rogaine as an upside hedge!

Good luck into the closing bell.
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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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