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S's over N's baby!


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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position in smh, c
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