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Screwy Louie!

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Europe trades remarkably well...so far!

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Man looks in the abyss, there's nothing staring back at him. At that moment, man finds his character. And that is what keeps him out of the abyss.

--Lou Mannheim, Wall Street



OK--so here we are. Trading. Writing. Watching. Hypothesizing. Strategizing. All of a sudden, out of nowhere, Fokker starts vacuuming the room! I schvitz you not! Did you ever see Dumb and Dumber when Lloyd makes the most annoying sound you've ever heard? Well, I can top that now! Fokk and Fokker!

Speaking of vacuums, a player walked into the S&P pit to dump some puts and the futes immediately gapped up a few. That's a telling sign of how incredibly thin it is out there and it's something to factor into your trading strategy. While there's (seemingly) ample supply in the street, we all know that the most vicious of rallies occur during bear markets. In other words, there's real risk to both sides of the tape here so regardless of your posture, stay alert and on your toes.

There are some constructive signs nestled in the muck. The financials hold their bid (although they did yesterday as well), the tape felt a bit "pressy" into the lows and the volatility measures FINALLY showed a few signs of fear. With that said, the breadth continues to lag and that really needs to pick up if Snapper is to emerge from his shell.

The rumors continue to pour through the trading wires and the sirens continue to wail outside my office. The fear is palpable on a human level--we just need to see it on a trading basis. I think we're getting close, mind you, but when emotion enters the financial arena (as it is now), it's difficult to ascertain how long it lasts.

Finally, and I've got to say this again, this is NOT an advice column and the purpose is NOT for anybody to tag along on these trades. Minyanville is an educational community and I share my (humble) insights with the hope that it adds value at some level. Please, my friends, you've got to make your own decisions. There are no gurus out there, only opinions, and as you've gotta live with your choices, you should make them for yourself.

Sorry to have to say that again but it's an incredibly important point. At this stage of the game, we know that nobody is infallable and everybody takes a beating once in a while. The goal is to identify a methodology that works for you--one that protects your capital while allowing you to participate at your own pace.

As always, I hope this finds you with some jingle in your jeans. I'll be back.

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