Seeds of Sorrow
I've noticed you dont have snake size in your Minyanville gear!
Let me take you to the movies
Can I take you to the show?
Let me be yours ever truly
Can I make your garden grow?
The trickling ticks continue to flicker and for some reason, I can't take my left eye of the German DAX. I'm not current on the state of affairs over there but, as a tape watcher, the action is curious to me. It was soft from the word go and, despite some early buoyancy in the stateside futures, it continues to slide lower (now down 3.5%). Again, I'm not sure what's going on but it warrants a mention (or three).
So what's happening here? Both the S&P and NDX are have been flirting with our levels and despite a brief breach, the bulls are attempting to toe the line. I've been watching the intraday stochastics and, much like they twisted yesterday (in overbought territory), today's trading has coiled these indicators the other way (oversold). As such, and despite the breadth (2:1 negative) and the banks (down 1%), I'm not pressing 'em here. I have my defined (and dripping) downside punts and, for now, that will do.
Taking a step back, I want to reiterate my current view. I've been relatively consistent with my (humble) thesis and I continue to sense that a hard rally is "out there." With that said, my best guess is that this latest lift was a simple alleviation of the oversold condition--not THE rally--and will soon give way to more selling (and a lower low). What I'm struggling with--and what I continue to talk through with the readership--is the timing aspect and where we stand in our phase trade.
From a metaphorical imagery standpoint, I'm trading naked right now. Aside from the front month paper, I have a smattering of March puts and if I sense further liftage, I can always buy some stock (against them) and trade the gamma. This style is clearly not for everyone but I'll always be honest with you guys and that's how I'm currently set up.
In Minyanville news, the critters report that, due to the cold weather, the fleeces continue to fly off the shelves. I wore mine through the airport yesterday and I got plenty of snaps on the snazzy snuggly top. I'm not sellin' ya, cookie--I would never push something that I wasn't fairly certain you'd dig--I just want to make sure that those who were jonsing for them (when we sold out) have fair warning on the current batch.
As always, I hope this finds you well--and warm!
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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