Bears on the Run
One of these days, Toddo, I'm gonna learn you a lesson!
Why don't you all f-fade away
And don't try to dig what we all s-s-say
I'm not trying to cause a b-big s-s-sensation
I'm just talking 'bout my g-g-generation
Holy melt up Hoofy! It's been a long time since you shook your bones and you've certainly got everyone's attention now. The question on every Minyan's mind, however, is whether this is the beginning of something beautiful or a simple (yet vicious) head-fake. How we approach these green acres will go a long way in defining our success so, please, lucid decisions are a must.
While this is surely an impressive showing from the bulls, I (humbly) believe that this is a counter-trend move. The most vicious rallies occur in a bear market and I there's no debating that today's move is vicious. The question I'm wrangling with is one of timing. Can this last a while and, more importantly, what type of price points will potentially come into play?
If we manage to bust through S&P 820, there is additional resistance in the S&P 830-840 zone. Further, the QQQ is bumping up against its trendline (from January) and I'm monitoring that development as well. While the largest issues in the market remain unknown, I find myself scrunching my nose and keeping my right hand firmly by my chin.
I'm gonna slip one leg into my bear costume (makes 25% conviction on the short side) and define my risk via stops and/or option premium. What type of stop am I eyeing? Somewhere in the S&P 830's I would think--I'm still walking through the charts. I'm not sure if this is today's business--breadth is strong and our tells are pointing to the north--but, right or wrong, that's what I'm thinking. So you know.
Apologies on the lag in posts---my systems crashed again (twice in two days) and take me at my word, nobody is more upset about it than I am. Gotta hop.
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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