More volatility than usual? I better hang onto my hat!
There are some things you can control and other you absolutely can't--and a blizzard on the eastern seaboard definitely falls in the latter camp! The Valentine's Day margarita massacre was an astounding success--Dorothy made is halfway through the second libation before succumbing to the giggles--but my flight home wasn't so lucky. As it stands, I'm working from Del Boca Vista and scheduled to migrate north later this afternoon. Whether I'm among the chosen few remains to be seen. Love that!
Let's worry about that when the time comes--we've got work to do first. The weekend was, for all intents and purposes, quiet and despite the cataclysmic prognosticators, we're still here and chuggin' along (thank you very much). News flow is relatively light as well--CSFB upgraded NTIQ and booted GILD, Monty cut numbers LLL, Bear was positive on EBAY and punted CPC, Solly kicked AMR (no drink for me!), Weisel upped KKD and downed ATVI, the greenback is getting smoked vs. the Yen and the Empire State Manufacturing number was an abysmal 1.13 (vs. exp. of 16).
On the geopolitical front, the posturing continues in full force. The antiwar crowd asks why the U.S is focused on Iraq's disregard of U.N resolutions when the U.S itself said they'll act alone if need be. They've got a point, I suppose, and this issue is quickly dividing the world into the "with's" and "against" camp. Toss into the mix the unrest in North Korea (threatening to abandon the 1953 armistice that ended the Korean War!), the discord in Europe (don't get me started on the French) and the continual threat of terror--and I think it's safe to say that world peace has yet to break out!
I walked through a schnitzel on Friday's close and, while it's a small trade, I'll continue to discuss it real-time. The front month paper (February) was chosen as it was a digestible capital outlay ($10.35) at an actionable entry point (light volume countertrend rally to resistance). Naturally, with the weekend quiet and expiry looming, this contract will start to drip premium almost immediately. My initial thought is to count to 100 backwards (by primes), let the scramblers do what they've got to do and then take a fresh look. All the while, I'm going to operate with a soft S&P 845 stop. So you're aware, there is "trauched" resistance all the way up the slippery slope and while S&P 870 will likely prove formidable (if and when), my schnitzel probably won't be around to see it.
Meanwhile, as I write, the Saddam exile rumors have kicked up and the futures are tagging right along. Obviously, I've got no "inside word" on what Saddy's gonna do but the street is running with this story (again). So you know and if you care--that's why the futes popped.
Tells today include the Citigroup (and the financials), WMT (and the retailers), the biotechs (BBH 84 breaks support), the dollar, the horsies (big cap tech) and the internals. Initial support comes into play at S&P 806ish and NDX 940ish (Thursday's low). Resistance resides at S&P 840-845 (and 870), NDX 980ish and SOX 280ish (around here) and BKX 725.
The snow promises to keep the ranks thin and, as such, we can expect volatility to be a tad higher than normal (less players making markets). When the tape is this coiled (short term), the bounce typically sings a minxy siren (especially during bear markets). Define your time frame, watch your levels, remain disciplined and remember to remove emotion from the mix. One hour does not a market make and the opening promises to be nutty, Austin.
Finally, I'd like to send a big shout out to Kobe Ray and the rest of the Rabkin's. I serendipitously enjoyed the big guy's 1st birthday this weekend and, despite some cake spillage (sorry guys), it was awesome. If good things happen to good people, you and your family have many years of smiles ahead of you. Thank you for allowing me to be a part of the festivities.
See you after the opening--hit 'em hard, Minyans!
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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