Hey Morty--do you believe this fakakta kid?!?
For once I'm completely in agreement with my partner. I'm not going down there. Do you know what those things can do? Suck the paint off your house and give your family a permanent orange afro.
--Austin Milbarge, Spies Like Us.
Another session slowly trickles towards the closing bell and Snoop Tone and I just had a communique that I thought would be helpful to the readership. I know that this is an emotional tape and, trust me, nobody wants to catch trading moves more than I do (especially when we discuss them before they happen!) However, nobody ever made money looking back--profitability lies in the days (and trades) ahead.
As I watched the action, I opined to my astute colleague that I had a strange sense of vuja de--like we've been here before but it's totally different. We started discussing the October lows and I recalled how, at the time, I felt a stiff lift was coming sensed that one more melt was needed (before it began). Tony, who nailed that bottom like a carpenter, made some salient points. He opined that, at the time of the Oct lows, the intermediate indicators lined up across the board--something we're definitely not seeing now. Further, he maintained that IF, in fact, this is the Sham, we'll have plenty of opportunities to participate.
These are good points and, honestly, they're exactly the type of information that I rely on Tony for. While I make my living in the nuances and attempt to trade the flickering ticks, the Snooped one takes a more abstract view of the action and removes himself from the daily noise. It all circles back to our discussions of time frames and their importance when crafting a strategy.
With that said, today's tape held the lunch crunch and the internals continue to act well. There's a ton of open interest in the S&P 850 line and, as such, it's acting as a magnet (thus far) today. Coincidentally, that's also a trendline resistance (from mid-January) and the bears are attempting to make a stand there. A more significant resistance resides at S&P 870 but, hey...let's worry about that if we get there!
Markets that are strong all day tend to end that way but, as my risk is defined, my inclination is to hold onto those (now) cheapie puts. I'm admittedly (and humbly) suspect of this rally but, as you know, I've been wrong before. With the world as fragile as it is, I think the potential reward warrants the incremental risk.
I've got some things to do before I make my way towards the West Palm Airport but you know I'll do everything I can to get another post to my fellow Minyans. There's surely a chance that my flight may be canceled and, if that happens, I'll be operating from Del Boca Vista tomorrow. Hey Morty--keep the pen!
Stay warm, my friends.
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