If this keeps up, I'm going to have to find an udder job!
Oh, baby, baby it's a wild world
It's hard to get by just upon a smile
Oh, baby, baby it's a wild world
I'll always remember you like a child girl
You wanna hear something pretty cool? Thus far, the critters have reached out and touched people from Albania, Australia, Austria, the Bahamas, Belgium, Bermuda, Cambodia, Canada (Canadians, eh?), China, Cyprus, the Czech Republic, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Malta, Mexico, Monaco, Netherlands, Poland, Russia, Saint Kitts, Saudi Arabia, Scotland, Singapore, Slovenia, South Africa, Spain, Sweden (but you're wearing Laiterhosen!), Switzerland, the United Kingdom, Uruguay, Venezuela and Yemen. Wasabi Minyans!
I know that this isn't necessarily the type of information you want to hear in the middle of the trading day but I was flipping through the passports this weekend and was struck by the diversity of our readership. It is truly a humbling notion and it reinforces our desire to put our best (four) feet forward and provide a proactive and fun learning environment. If I haven't said it recently, and on behalf of the entire Menagerie, thank you for helping us get to this point-they best is yet to come!
Turning our attention back to the tape, our trading eyes are focused on the semiconductors as they're down an additional 5% today. We know that this sector leads the NASDAQ around by the nose and, as such, we can't ignore the distribution that's taking place. SOX 310 fills the gap from the opening on November 20 (nice eyes, Junior) and we'll look for signs of traction once we get there. The weakness isn't limited to this complex, mind you, but it's certainly the sore thumb in four-letter land.
The action in the old school (S&P) isn't much better although there are signs of life there. Soft goods, energy and pharma all act "dry" and while they're considered "contra tells" for the broader tape, it's worth noting nonetheless. It continues to be my (humble) opinion that the financials are the single most important sector in the market place and I'm currently walking through the banks and brokers looking for levels of support.
As it stands, the internals continue to urge caution but it's interesting that, despite the carnage, the S&P continues to (thus far) hold support. Things that make you go hmmm. It's also worth pointing out that crude is edging higher (pretty sneaky, sis) and we should continue to monitor that as an Iraqi friction proxy. Other than that, it's more of the same as the hopers and the pressers continue to shuffle stock to and fro.
I've been asking myself some serious questions regarding my metaphorical trading posture and I wanted to discuss it with the readership. You know that, if nothing else, I'm an honest guy and as such, I'll be the first to tell you that Boo and I were emotionally drained after Hoofy's spirited sprint. It's ironic that the Razor Burn thesis is (thus far) unfolding as being early to the sell side was "dingy" (timing is everything). Still, a good trader will never be influenced by a desire to make up opportunities as profitability lies in the trades ahead. As such, I'm weighing my year end thesis against the prospect of defining my risk in the near term.
Put another way, if I had two appendages in my bear costume I would likely remove one now as we've seen some serious carnage during the last week. I've been operating with the intention of keeping a short bias on and using strength to add exposure-and I still feel that's the money trade-but I also want to be sure I don't let a decent trade slip away. As such, I'm going to place an S&P 910 "stop" on my furry leg and will reassess the situation if and when. Again, this decision is one of short-term timing-my conviction level that lower levels are a matter of "when" not "if" has not wavered.
I hope this finds you well, my friends...happy hunting.
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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