Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Game Plan

By

Thataboy Toddo--way to strap 'em on!

PrintPRINT



A new session springs from the gate and another day in Minyanville has begun. The pervasive chatter pre-opening wasn't centered on whether we would rally-the only question was how much. That struck a chord with my alter-ego, Zig Zaggler, as he hates conventional wisdom. Almost on cue, the call buyers walked into the pits and bought multiple thousand lots of DIA and QQQ calls. I surely see what they see (down a LOT in a short time) but remember-if something seems too easy in this market, it probably is.

That, of course, is not to say we can't lift-it's likely only a matter of time before a counter-trend rally occurs-but I'd suggest mapping out a game before you run onto the field. In other words, if you were schvitzing yesterday because the tape was down, remember that feeling when you're swimming in the seas of green. Spending your day wishing you were longer (when they're up) and pining to be shorter (when they're down) makes for a miserable trading existence.

A check of the morning breadth shows winners beating losers 3:2 and our super-tells (SOX and BKX) are holding their own, thank you very much. My inclination continues to be use rallies as an opportunity to add short exposure but due to the recent carnage, discipline dictates using "wider" scales. I've been steadfast in my belief that the downside is a function of "when" not "if" and I continue to feel that way. This leads to an obvious and natural question: if I want to be shorter higher (and use prices to my advantage), why would I set a buy stop on my exposure?

My concern (and the reason for the initial "stop") was the short-term trading nuances (ebb and flow) and, upon further review, I'm going to remove that stop level. My time frame, and I will be clear on this, is through year end and I would prefer to add appendages (into my bear costume) at higher prices-not remove them. At first glance, this may seem to conflict with my earlier post but I'll argue that you must always adapt to the market and, as traders, we can call audibles at times.

Six-two stacked monster, baby...and let the games begin.

Good luck.

R.P

< Previous
  • 1
Next >
positions in dia, qqq

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE