I drank some milk on my lunch break and I'm feeling feisty, brotha!
Can I hit it in the MORNING
Without giving you half of my dough?
Alright, I've figured it out. I knew that there was a simple explanation for what was going on. Bucky isn't actually getting bigger...the entire trading desk is getting smaller! That explains why my larger than life assistant seemed to be morphing before my very eyes (and sulks when I pen my concern for the world to see). It also explains why he's running around the office right now screaming "Honey, I shrunk the desk!" Aren't you gland we figured that out?
The question on everybody's lips is whether this lift is a simple alleviation of the oversold condition or the beginning of something bee-utiful. You know my (humble) thoughts, but let me remind you that I am offering them in an educational context and with the hopes that it adds value to your process. As the bear market trudges along, the so called "gurus" (which, trust me, I've never considered myself) will be weeded out faster than dandelions in the desert. It's an inevitable process and, if you haven't caught on by now, nobody can do your homework for you. That lesson was painfully learned when the bubble burst and those that confused brains with a bull market were asked to leave.
Since I began writing in July of 2000, it was more of a hobby than a job and, over time, it's developed into a passion. Not because of the exposure, mind you-because it offered a forum with which I could actually give something back. There are many cynics out there who can't grasp that concept and, truthfully, I think that's sad. Some people will "get it" and others never will...that's just the way it is. I've found, however, that if you conduct yourself in a manner consistent with who you believe you are, everything else will fall into place.
Anyway, enough with the Socrates Johnson...let's talk tape. Today's bounce attempt was intuitive as, well, the market has gotten smoked for over a week straight. Now it's decision making time for the portfolio managers of the world who must decide if this is the turn or an opportunity to lighten up. This is the psychology metric in a nutshell and why it's so important to keep your finger on the pulse of the collective thought process. We know that the buyers are higher (performance anxiety) and the sellers are lower (oops, I did it again Brittney)-but what do we do now?
I don't want to be redundant, I don't want to be redundant, but there aren't any blanket answers. If one man gathers what another man spills, the buyers into last night's close look pretty smart right now. Still, you can't base your decisions solely on what the latest tick says-there are horizons and risk profiles and goals and all sorts of other variables that affect the decision making process. Again, for the traders among you, there are trades for the day, trade for a catalyst and trades for a thesis. Understand what you're looking for and remain proactive in your decision making process.
As far as the here and now, the tape hangs in there although there are warning signs to note. The banks don't act particularly well and the cyclicals have struggled thus far. On the flip side, the whippy semis are holding their gains and, as long as they do, tech will hold a bid. The flows have been relatively non-existent since that gorilla (read: institution) tried to bully the market higher and we're sitting near resistance. I want to make sure you guys saw that I slipped a leg back into my bear costume (makes 50% conviction on the short side) as it was tossed in there with the rest of my random musings.
That's about it friends...there isn't a day that goes by that I'm not thankful for the opportunity to dance with my critters and I wouldn't be able to do that without ya. Hey, it's slow...how bout a quick little poll? What was the greatest athletic achievement of all-time? Send your responses to firstname.lastname@example.org and I'll come back with a winner. Polls close at 3pm!
Hope this finds you....awake!
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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