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Whips and Change


When it's this volatile, trading with smaller increments is often a good idea.


Sometimes I feel, sometimes I feel
Like I been tied to the whippin post
Tied to the whippin post, tied to the whippin post
Good lord I feel like I'm dyin'

(Allman Brothers)

It's Hump Day in Minyanville and a hopeful Hoofy continues to do battle with a faithful Boo. I've fielded numerous phone calls from my trading brethren and, for the most part, they're bettin' that the bodacious bovine can bring home the bacon into quarter end. What I'm trying to ascertain is if Boo's being stubborn or if the pervasive bullishness is the ultimate red flag. My gut? You know my gut.

I've watched the tug-o-war unfold this morning and I've made a conscious effort to remove emotion from the mix. There's a tendency in the trading community to look back (regardless of the outcome) and lament over not doing more (or less). For instance, I can't shake that nasty feeling in my trading bones but I'm admittedly operating with a much tighter risk profile. If we melt, the old Toddo would have stuck a fork in his eye for not being more aggressive. However, this is a different market and it requires adaptation. In other words, there will be no looking back -- that's wasted energy.

Looking at today's tape, the semicaps have acted dry all day and that's lending to a relative outperformance of the Nazz (N's over S's). I haven't wrapped my arms around why -- perhaps it's the desire to secure beta into quarter end -- but it's worth a mention. On the other side of the fence, the banks act a tad heavy and I'm watching the brokers for signs of confirmation. Finally, the morning breadth, as it stands, has losers marginally outpacing winners.

I've got 5-day charts (gips) up in the NDX and S&P and I'm minding that upside gap carefully. The bulls are obviously gunning for that "fillage" and, in this environment, I'm not ruling anything out. I've taken one giant step back and a handful of deep breaths as I find my way today. The hedgies out there are standing in a circle shooting one another and I'm saving my bullets for the whites of their eyes.

In the meantime, I like my May puts as they're an extension of my thought process and offer defined risk. Nobody is bigger (or smarter) than the market and these instruments afford me the opportunity to patiently await my prices. In the meantime, I'm being careful not to overtrade and remaining open-minded that I may be wrong. It's happened before and it'll happen again. It's the cost of doing business.

On that note, I'm gonna go and focus on the flickering ticks. I want to thank you guys for the fantastic welcome you've given Charlotte-Anne and B-Mac. They've heard the stories of how "special" Minyanville is and now they've seen it with their own eyes. I continue to be amazed at how many good Minyans there are out there -- and for that, you should all be proud.

I hope this finds you well.
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