The Waste Case
If we're the bad news bears, where's Amanda?
So you can get on with your search, baby,
and I can get on with mine.
And maybe someday we will find
that it wasn't really wasted time.
The banks are down 3%, the breadth is 3:1 negative, the downvolume/upvolume is a whopping 11:1--and all I'm hearing from my fellow traders is "look at the TRIN!!!! We're gonna pop!!!" I don't mean to be a bitter critter--the TRIN is definitely intriguing. However, this is exactly the issue that continues to plague me about this market. Despite the overt negatives and the flashing red technical signals, traders seem to be continually drawn to the promise of hope. Don't these same players need to be scared shvitzless before we can mount a sustainable turn?
I don't have the answer but I certainly wanted to pose that question. These are critical times for the market and it calls for extremely tight discipline. It's entirely alright to trade 'em how you see 'em but make sure you define your exposure in the event that you're wrong. Nobody--and I mean nobody--can out think the Minx on a consistent basis and it only takes one bad decision to forever alter your existence. Stay on your toes please.
Along those lines, I've been having a raging debate (with myself) regarding our metaphorical bear costume. I'm fairly light and defined with my risk profile but I've asked myself (more than once) if I need any overnight exposure (either way). From a tactical standpoint, opportunities arise daily and our pitch will show itself if we're patient. The scenario we discussed this morning is seemingly playing out but, again, it's impossible to shoot the Minx in the back. What if you miss?
I'm gonna sit tight for the time being, give Boo the benefit of the doubt and keep my leg in the bear costume. The BKX, which is a tremendous leading indicator, pooped through our 700 level and I think that's an important development. Further, the bad news bears emerged to take the pennant and that's a negative input as well. I see the TRIN (5), I see that the semis are (thus far) holding SOX 280 (INTC trading dry) and I appreciate the unknowns. However, I'm comfortable with my exposure and, by extension, my metaphorical imagery.
The world isn't a very kind place right now and the trading environment brutal. Still, there are many things to be thankful for and I'll remind you to take the time to appreciate what you have. It's easy to get caught up in the "woe is me" mindset but, honestly, it could be worse. Think about your family and close friends and imagine a life without them. Now think about the flickering ticks. It's not so bad, is it? Think positive, fellow Minyans--this too shall pass.
Have a peaceful night.
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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