He must be eating a lot of bran!
You're out of luck
And the reason that you had to care
The traffic is stuck
And you're not moving anywhere
The fluxy Minx continues her slink as we edge through a slow Minyanville afternoon. During stalemates like this, the tie typically goes to the runner (prevailing trend) and that fact isn't lost on the critters. Boo (now a mutterin' stutterin' hick) can only stare at his shoelaces as Hoofy (in his pimp daddy suit) counts his funny money. Daisy? She's spending daddy's trillions at Bergdorf searching for the perfect outfit for tonight's opening!
Outside of the continued weakness in the greenback and a fresh spike in crude, the landscape remains drifty. The financials chilled after the early morning zing but they still hang tough (keep an eye on Citigroup (C:NYSE) as it's slinking lower). Retail remains soft, biotechs hold their bid and energy continues to intrigue. To clear up the earlier post, it's still my humble opinion that energy will outperform (tech and financials) in the years ahead. However, I was referring to a rotation trade similar to the one that spiked the drugs.
A quick peek at Flow's Diner shows that someone bought 13,000 "Mini NDX" puts (which is the same as 1300 NDX puts or, in layman's terms, 52,000 QQQ puts). That's what hit the tape and it's reminiscent of yesterday's dip (at about the same time). Hey, at least this guy is regular!
Talking tape, Scotto and I have been pinging back and forth regarding this current juncture and how to approach it. Conventional wisdom--and there's a lot of it--is that this is a healthy basing above (new) support and the Minx is edging through an (upside) price discovery phase. The combination of performance anxiety, technical winks and economic validation is a powerful trifecta that supports that thesis. Get through here (S&P 1075), they argue, and the next magnet is S&P 1150 (50% retracement of the entire downside). That's the bulls case.
On the other side of the coin, the potential caveats are well documented and if (when) the downside comes knocking, it'll be well reasoned. How you approach your financial decisions are a function of two things: time horizon and risk tolerance. Make lucid (unemotional) choices that you can live with (both ways) and don't look back--that's wasted energy.
Speaking of energy, thanks for all the positive vibes on the Ruby Peck Foundation for Children's Education. Tis' the season to give something back and, true to form, the Minyans have stepped up. We have grand plans in the philanthropic arena and we're determined to make a difference. There are alotta ways to profit, my friends, and some are more rewarding than others. That's what makes people people and Minyans Minyan!
As always, I hope this finds you well.
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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