A Keppe Fest
Does the tape act firm or heavy? YES!
"YOU'RE GOING THE WRONG WAY!"
"How does he know where we're going?"
"YEAH! How does he know where we're going!"
Neal Page and Del Griffith
Planes, Trains & Automobiles
These are stressful times, no doubt about it, so I suppose it shouldn't come as a shock that the Menagerie has been wound up pretty tight. As I walked to the kitchen to grab some ketchup for my cheese fries, I passed the conference room and saw Hoofy and Boo standing nose to nose seemingly ready to "go." I rushed into the room, sat the two critters down and joined them at the conference table. The conversation went something like this:
Toddo: Fellas, you need to seriously chill out. With all the anger and pain in the world, it's important to have a support system in place. You guys surely have variant opinions but, at the end of the day, you're pals--don't let the flickering ticks cloud that fact.
Boo: That's easy for you to say but I haven't been able to sit down for a week! I mean, what tha...is everybody THAT certain this will be a two week affair? Even if it is, there will be substantial costs incurred and at the end of the day, the economy still sucks!
Hoofy: You may be right Boo but perception dictates reality in the market and investors are "looking through" the war. Besides, with quarter end creeping closer, portfolio managers are more concerned with relative performance than absolute performance. If the market goes lower, so be it. If it rallies without them, they'll look like shmucks!
Toddo: There's no denying that the S&P acts great and the buyers are panicky. Still, we've seen this movie before, Hoofy, and if you're gonna watch it, I suggest you find a seat near the door.
Boo: What about expiration--is that lending a hand to this movement?
Toddo: I've always felt as if expiration exacerbates the movements rather than creates them. As the Minx powers through strikes, dealers are forced to cover (sell) to hedge their delta risk. That's surely contributed to the whippiness.
Hoofy: The purist would say that it doesn't matter WHY, Toddo, the only thing that matters is the bottom line. I mean, honestly, look at the macro indicators--they're leading equities and they continue to point higher. Plus, the BKX is pushing your level again!
Toddo: True...but there are many ways to skin a Minx, Hoofs, and it's entirely too early to tell if fading this rally is smart or silly. They don't FEEL like they're ready to come in yet but after the recent move, I've clearly got trust issues. And watch those internals as they've yet to confirm the upside.
Boo: I don't know Toddo--I think that gaming the upside from these levels is risky regardless of what they do. Investors seem to be pricing in a perfect geopolitical resolution. It just doesn't seem right to me.
Toddo: It doesn't seem right to me either, bro, but we've been doing this long enough to know that we're simply pawns in this game. We must remain humble, disciplined and patient. When it's all said and done, we'll get there. Trust me.
Hoofy: One last thing, boss man, do the Minyans know that the contents for the charity auction raffle are now listed in the Ruby Peck Memorial Library? There's airline tickets, retreats...all kindsa stuff! It's valued at over $14,000 and it's only $100 per raffle ticket. That's coolio!
With that, I glanced at the screens and saw the Minx on the move again. I know that, with angst at DEFCON levels, the potential for an upside capitulation existed and that could be both a good thing or a very bad thing--or maybe both. I stepped towards the door and while maintaining eye contact with my friends. "Keep your heads up and your mind sharp, guys, it's only gonna get nuttier." They nodded in agreement, looked at each other and smiled--and all way well once again in Minyanville.
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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