Reports of my death were greatly exaggerated!
Seems that I was busy doing something close to nothing
But different than the day before
That's when I saw her, ooh, I saw her
She walked in through the out door, out door
Danny Zuko -- a.k.a Fokker -- just strutted into the room wearing a leather jacket while combing his hair. His interlude with the Q-Lounge waitress at Minyanfest evidently empowered the young lad and he's feeling rather macho today! How do I gingerly break the news to him that I greased our server and asked her to be "particularly nice" to the kid hawking the Tee's? Wow -- I'm a bad guy!
I've been having a handful of conversations with the critters today as some of them seem to be rather perplexed. In the interest of communication, I wanted to share a portion of that conversation with my fellow Minyans and see if we can unearth any nuggets of value. Take a look.
Boo: Hey Toddo, I'm gonna start calling you Fokkerboy! I mean, honestly -- the first triple-digit down day and you run for the hills. I don't get it!
Toddo: Come on bro, cut me a little slack! We toughed it out through Friday as I sensed that it was a legitimate buying panic and we've simply used today's melt to pare back some risk. I still believe that there's a fair amount of downside -- perhaps even new lows -- I simply repositioned my exposure to a more advantageous (and balanced) posture.
Hoofy: So you're diggin' the upside eh' Toddo? Schwing!
Toddo: No Hoofy -- I'm still quite bearish in the big picture. However, I'm nothing if not honest and my metaphorical imagery has to be consistent with my level of conviction. I've been "trading around" a short bias and it's clearly been a battle. Now, as the bloom comes off the equity rose, I've refocused my exposure on "underneath" puts and I must be forthright in communicating that to the Minyans.
Boo: So -- you're hedging yourself. Typical.
Toddo: What do you want from me Boo? To tell you where the market is going to go? NOBODY knows that and anybody who tells you otherwise is a liar! Our job dictates assigning a probability to a handful of outcomes and positioning ourselves accordingly. I'm still in the camp that last week was a bear market rally and it will ultimately fail. What I'm trying to wrap my arms around -- again -- is the timing aspect. Will we get one more thrust higher or have we seen the near-term top? In other words, has the SHAM (stiff lift) already begun or are we STILL shimming for a bottom?
Hoofy: How can you ask that? We rallied a gazillion points last week!
Boo: Yeah, it's called the great American suck in Hoofy and congratulations, you fell for it again! How many times are you gonna call a bottom -- till you're right? Newsflash -- not everyone is a cartoon and, as such, there's a limit to what people can afford to lose. If the most vicious rallies occur in a bear market then, shocker Fokker, we're still very much IN a bear market.
Toddo: First of all, Boo, let's call a spade a spade -- you lost your discipline last week. Regardless of what you say, you were hoping and as we've learned over the years, hope isn't a viable investment vehicle. I'm not saying you're wrong -- I actually agree with you -- but we need to take a chill for a second and think this through. The first thing I will ask is for you to define your time frame: Are you trading for the day, week, month, year or the long term? It's impossible to make a decision until you figure that out. If you're a shorter-term type, watch NDX 1050 and SPX 860 -- we're kinda there now and they're the first support.
Hoofy: Do you think we can Snapper? Hey...where IS Snapper?
Boo: Snapper's dust, dude -- I hogtied him and stuffed him in the broom closet. With the breadth 4:1 negative and the situation overseas tightening up a bit, I didn't want hear it from that clown. I've got bigger issues on my plate -- and if (big if) I can take out S&P 850, it'll shake the tree in a big way.
Toddo: I see that level, Boo, but regardless of what happens, I'm not gonna look back. I've got one leg in my bear costume (25% conviction on the short side) and I'm balanced to the point where I can buy down or sell up. It's entirely more comfortable and consistent -- especially with the vast unknowns in the world.
Daisy: Well, I personally like it when you undress Toddo -- it's hot. Take it easy on the language, though -- you know Charlotte-Anne isn't gonna put up with your nonsense and she won't hesitate to er, witch slap you. I happen to think she's fantastic and I'm gonna write her at firstname.lastname@example.org to welcome her and offer my suggestions on how to make Minyanville better!
Toddo: Yeah -- she's the real deal alright...an absolute star. I encourage you to write her with any/all feedback regarding our humble little town. We've got some BIG news coming out regarding the Gazette and the University but I'm not allowed to discuss it. Between Casey and C.A, I'm always one step away from Humblesville!
Sammy: Just take it easy, Toddo, and remind the Minyans to do the same. These markets are no joke and I'm not sure I've ever seen a more dangerous tape. This too will surely pass -- our goal is to get there in one piece and do our part to better the world. Good luck!
With that, the critters slipped back into my mind and I juggled hats and focused on the tape. S&P 850 to 860 and NDX 1050 are important technical and psychological zones and I wanted to see how the Minx responded to them. Deep breaths, friends --less than two hours to go.
I hope you're all faring well.
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