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Haircut!

By

S's over N's baby!

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Almost cut my hair
It happened just the other day
It's gettin' kinda long
I coulda said it wasn't my way

(Crosby Stills Nash & Young)

This is a funny business. If the ISM was better and the market was ripping higher, I'd be blasting myself for a lack of discipline. I was thisclose from stopping myself out and took a deep breath and a hard look at my trading thesis. I'm humble enough to know that the market can rally (still could) but rather than defer to the price action, I tried to use the price action to my advantage. Was it a good move? The jury's still out, cookie!

A quick little blurb for the option mavens among you. I've started looking for "cheap" downside paper out to April as vols continue to come under pressure. While you could argue that if the VIX was a stock chart, it would be "broken," I sense that it's approaching "disconnect" territory (with so many unknowns in the world). This isn't a call for the near term, per se, but I've started a slow, methodical scale.

Meanwhile, back at the ranch, the semiconductor index is sticking out like a red thumb in my sea of green. It's not an egregious disconnect yet(they outperformed on Friday) but it certainly bears watching. Aside from the obvious crosscurrents coming out of Morgan's conference, SOX 300 is an important psychological (and technical) level. Yes, my stochastics are still urging caution and I'm trading them that way.

Sticking with the technical theme, I've also been eyeing Citigroup as it tickles resistance at 34 and Wal-Mart as it flirts with 49. I've been watching the industrials as well--GE stochastics are scary, GM has been heavy out of the gate and the ISM psychological impact will first appear in this complex. For what it's worth.

Patience and discipline, my friends, patience and discipline. Outside of picking up a few puts near the opening, I've done less and that's a good thing. If you allow yourself to be sucked into the emotional tornado, you're decision making process will be inherently flawed. Take a deep breath and find your pitch. It's out there.

I hope this finds you well.
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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 todd@minyanville.com.

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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