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The Minyan Bowl


Hey fellas, did you see twinkle toes Fokker bowl? Comedy central!


Good morning and welcome back to tin can ally. The critters laced 'em up yesterday and rolled their hearts out for charity. It was a fantastic event and we wanted to start the week with a big shout out to Jordana, Gareth and Scotto for a job well done. A special thank you to Mr. World Class Champion Buc's fan and Mr. World Class Joisy for their generous donations to the cause. All told, our charity auction raised over $50,000 for Jacob's Cure and The Ruby Foundation for Children's Charity and that, my friends, is Minyanville at it's finest. Thank you!

I spent some time this weekend ruminating about the state of the tape and I can tell you that, despite my deep downside concerns, those pesky pangs continue. On Friday, in an effort to remove emotion, we operated with an upside stop and were a witches skit away from covering. Alas, the flurry of buy side flow couldn't nudge the Minx over her hump (what hump?) and despite the constructive underlying tone, Hoofy's two-week streak was history.

We saddle up this morning's horsies to find a tricky two-way set up in the equity markets. A quick look at the major indices offers a visual oxymoron for the technicians in our midst. We've already discussed the major resistance at S&P 870 and as long as we're beneath that level, trading from the short side will likely play stream to the market's salmon. However, before you start high fiving your bandits, Boo, take a gander at those cute little "W's" formed on February's charts. With the right emotional backdrop (psychology), those could prove to be bullish in the near term.

Is that enough to prompt a mass hibernation? I maintain that the key to successful trading is to identify an appropriate time horizon and risk profile and, as such, a blanket view is difficult to offer. Could a near-term nuance test the will of the bears and plant an upside seed of performance anxiety? Absolutely. Do I feel that the current (triple) bottom is a strong enough foundation to support a sustainable rally? No, I don't. The key to our success, as always, will be the timing aspect of our capital commitment (both ways).

The weekend news was constructive on a macro level. The capture of the senior Al-Qaeda operative and the Saddam spider dance (dance Spider!) will likely bolster psychology. However, Dubya has already begun posturing to shift the focus from disarmament to an outright regime change and that should keep the outlook muddled. The trading community has been actively discounting the mindset of the masses such that they can take the "other side" of conventional wisdom. What we must now figure out is how much of the recent demand was predicated on the missile destruction and, perhaps more importantly, will the masses begin to price in a potential resolution to this mess?

It remains my humble opinion that this war chatter is the latest in a long line of poor performance excuses. If it's not Y2K, it's electoral confusion. If it's not accounting irregularity, it's corporate malfeasance. The truth is, the alleviation of the overcapacity caused by the bubble will only be cured with time. Further, if the market is to regress to the historical mean of return, it stands to reason that the obscene upside overreaction will be mirrored by a prolonged mire in the muck. With that said, I'll once again circle back to the concept of time frame. If there are counter-trend rallies within the context of a bear market, we must focus on the journey rather than the destination and attempt to make hay when the sun shines.

While S&P 870 should be the roof that's on fire and the guts of the market (VIX, stochastics, sentiment) are a far cry from the historical extremes (that have unshered in past rallies), I'm admittedly wary of the current risks (both ways). At different times, various metrics will assume different weightings in our trading mix. We'll (hopefully) get some clarity in the fundamental arena from Morgan's Semiconductor confab and we already know the technical picture. However, the structural influences (risk premium) and investor psychology are huge and we must respect the wide variance of potential outcomes in that regard.

One step at a time, fellow Minyans, as we walk our path and find our way. The goal, as you know, is not to play every situation--we just want to have a high win percentage on the moves we choose to play. I've said it before and I'll say it again: the ability not to trade will be as important as our trading ability as we wade our way through this mess. High percentage bets against the backdrop of capital preservation may not be sexy, but slow and steady will put us in a position to win the race.

Finally, let me once again thank you all for the wonderful sponsorship for our philanthropic efforts. Giving back isn't measured by dollar signs and you don't have to be a big shot to make a difference. Do something Joel every day--it doesn't take that much effort to do the right thing, be a better friend or make the effort to help someone out. There's a lot of hardship in this world and it should never take something bad to make you realize how good we all have it. At the end of the day, we're all on the same team.

Good luck today.
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