Uncle Todd's Band
Hey Toddo, if you don't need me, I'm gonna go visit Pete and Woody in Zona!
Well the first fades are the hardest fades
Don't you worry anymore
When life looks like Easy Street
There is danger at your door
The opening noise has quieted down and the battle of evermore has officially begun. As you're aware, I'm in quick hit mode and used the pullback to take in (read: cover) my underlying exposure while leaving my "odd lot" puts in tact. I'm not championing ANYTHING (not my style), I'm simply trying to illustrate my preferred style of risk management. It's important to understand WHY you put a trade on. The SPY try was for the opening fade and we got it. Onward...
The opening gaps are in the process of being filled and I'm currently debating whether this is a buyable dip or the beginning of rollover city. The breadth is firm, the semis and financials are dry and our macro tells continue to point higher. That's the bull case. Boo, however, is pointing to resistance (S&P 820, NDX 990ish), the fragile "bottom" and the looming unknowns. Which critter will be bitter when the closing bell tolls? I don't have a clear sense but my small puts are indicative of my mindset and I'm daytrading against that slight bias.
It's worthy to note that our old friends FNM and FRE traded up to resistance (61 and 53) and stalled the first time. I nibbled on some April puts in this complex (out of respect for the technicals) and will now watch. I'm still unsure of how crowded the short side is but I'm small enough to be comfy. Just so you know and in the interest of full disclosure, I plan to add to the position if the stock rallies and will take the trade if it sells off. Again, I offer this in the interest of sharing my methodology and NOT as advice on how to act.
Deep breaths, Minyans, we've only been open slightly more than an hour. As always, I hope this finds you well.
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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