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Stranger Than Fiction

By

Stay lucid Minyans--emotion is the enemy when trading--and don't rationalize your risk.

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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


(Grateful Dead)


Mama said there would be days like this and Mama was bound to be right. With Shanghai getting thwacked for 9%, durable goods falling off a cliff (-7.8% vs. exp.-3%), Iran heating up, sub-primes falling down and technical levels falling like leaves from a tree, Boo is licking his chops for the first time in a mighty long time.

A few points of Parliamentary procedure...

  • If the sharpest corrections occur in the context of a bull market, Hoofy would be quick to note that Shanghai is still up 3.6% for the year.

  • Note that asset classes are lower across the board---crude is off a deuce, gold is ten handles lower and equities are Punky Brewster (S's-14, N's-30)--while the dollar is also getting hit (DXY -50 bips). Remember, a lower dollar is necessary for higher asset classes but we've repeatedly noted that they can all go down together.

  • Fed Fund Futes are now suggesting a 40% chance of a rate cut (vs. 20% yesterday). Alotta folks are conditioned to equate rate cuts with stimulus but we've been short bandwagons and long "asking why?"

  • Our levels of lore will break on the opening so watch for S&P 1445, BKX 119 and EEM 117ish to morph into resistance.
  • Speaking of financials, are you watching the broke and broken brokers?

  • Did you see that the trannies were down 2.4% yesterday and stopped directly at TRAN 5K acne support?

  • Can the Raiders please keep their eye on JaMarcus?

  • Stay lucid Minyans--emotion is the enemy when trading--and don't rationalize your risk. Watershed declines sometimes toss the babies out with the bathwater. Keep an eye on your babies and use prices (with defined risk) to your advantage.

  • Naturally, in what promises to be the nuttiest day in years, I'm scheduled to shoot to the left coast this afternoon to deliver the keynote at the Ameritrade Disneyland Super-Soiree. Thank goodness for wireless trading!

  • Good luck and just remember---you're a Minyan!


R.P.

No positions in stocks mentioned.

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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