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The Low Down


When life looks like Easy Street there is danger at your door.


We sit in the car outside your house
I can feel the heat coming 'round
I go to put my arm around you
And you give me a look like I'm way out of bounds

(Bruce Springsteen)

Alright team--I gotta come clean. I've clearly been early with this latest zag (longtime readers know that I'm always early) but I still must share what's on my mind. At the risk of pissing Hoofy off in a big way, I want to say that I'm a scared bear--and I'm not talking about the upside.

My fear is that there is a downdraft coming that will make the last sell-off look like a walk in the park. I can't tell you from where it will begin and yes, there's a chance that I'm dead wrong. Nobody knows (with certainty) what WILL happen in the market and this isn't an advice site--it's a community of sharing. With that said, I will offer that I feel this in every inch of my trading bones and I'd be remiss if I didn't express it to my fellow Minyans.

Obviously, as we've learned, timing is everything and that's never been more clear than during the last week. However, I humbly maintain that the recent action is a classic bear market rally and the very fact that so many people disagree with me illustrates that point. Grizzlies are filled with broken promises and false hope and, with the benefit of hindsight, I don't believe that this time will be any different. Could I be wrong? Sure. But I will always be honest.

This is a trading diary--not an investment diary--and as such, I'll continue to take our journey one step at a time. It's never been my style to stand at a level and stubbornly battle the Minx--I have too much respect for the process and understand that my role is one of a pawn. What I will do, however, is trade around my positions with a particular bias and currently, that bias dictates that I scan my screens for cheap downside paper in a smattering of sectors. The financials are a particular favorite as I feel there are structural flaws in that industry.

While this last rally surprised me, I believe it's a blessing in disguise if approached properly. Please, though, I won't accept "thanks" if I'm right or "blame" if I'm wrong. I only share my process and thoughts with the hopes that they add, at some level, to your process and thoughts. My only point is, please, take a deep breath and hard look as to your needs, wants and financial horizon. Nobody is bigger than the market--but with a little luck and a lot of help, we may just find our way to the other side.

I hope this finds you well.

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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

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.

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