One day at a time, baby.
Well the music's thunderin', restless and hot
You keep firin' me glances across the room
And I can't stop wonderin' just what you got
Get the feeling I'm going to find out real soon
(The Grateful Dead)
Oofa! That was one hairy flury! Sorry if my posts were terse and typoed--when penning a real time stream of consciousness, there are bound to be times when it's more important to get the info out asap. The last hour was such a time. I mean...I almost didn't have time to eat my second lunch!
Now that it's (relatively) calm, lemme explain the madness that is my method. You know that, as long as we fluffle around under resistance in the S&P, I've got a bearish tint to my view. As such, I've been "trading around" a short side bias. When we spiked above S&P 840 (this morning), I added to my shorts (and slipped another leg into my bear costume). On the slippage towards S&P 830, I covered my day trades while (more or less) keeping my original exposure (hence removing that leg and leaving the one paw).
Why, you ask, didn't I let it run? Three reasons, really. One, the breadth barely wavered in the S&P and that's bullish (at least for now). Two, the banks held their bid and they're the most important sector in the market. Finally, the five day uptrend in the S&P was bound to hold the first test (it did). If we melt, will I be upset that I covered that incremental exposure? NO--as I've been saying, the mechanics of the swing are as important as the results of the at bat.
Casting our eyes forward, the NVLS mid-quarter update is after the close and from what I can tell, it's a crowded long. What that means, trading neophytes, is that players have bought it into the meeting and, as such, the upside may be a bit tougher (as those longs sell it on the catalyst). Does this mean it can't go up? Nooooo...it just means the road will be a tad steeper.
Tomorrow morning, Monsieur Beeks will swing by (that swinger!) with the GDP (est. 1.0%), Chicago Purchasing Manager Index (exp. 52.5) and the Charles "see ya, wouldn't wanna be ya" Woodson Confidence number (exp.79.1). Franz Blix will also be pomping YOU up during the morning hours and you can bet all ears will be tuned in tight.
I'm keeping that one leg in my bear costume overnight despite what is (thus far) constructive action in the market. Again, there's traunched resistance all the way up to S&P 870 but, for purposes of this paw, I'll likely rethink my posture if we jig through S&P 846ish. Until then, I continue to feel that the downside is the path of least resistance and the October lows are eventually going to be dust in the wind, dude.
It was a nonevent day for our kick-ass charity auction and we'll likely end the session with Mr. World Champion Buc's fan bidding $12,000 and leading the race. Rumor has it that Daisy (or Hoofy) may toss is an post night-cap night-cap with the winner but, as it stands, that has yet to be confirmed. Either way, the REAL winners in this whole auction are Jacob and the kids--so if you're on the fence, go for it cowboy (or cowgirl). At the end of the day, it's what really matters.
Speaking of the important stuff, I would like to leave you with a blurb that's likely familiar to my old school readers but remains one of my faves. As Muhammad Ali once said, "Today I am 59 years old, tomorrow I'll be sixty. Yesterday I was 22. Don't wake up tomorrow and wish you had today to do all over again." Sage words, Champ! A quick Minyan happy birthday to my boy Woody is Zona and my friend Michael in New York--toast a Bud to the sky and enjoy your special day.
Have a peaceful night.
Daily Recap Newsletter