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Ballstein Trading

By

Sell hope, buy despair.

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Now watch as the ball revolves and the nighttime falls.
Again the hunt begins, again the bloodwind calls.
By and by, the morning sun will rise,
But the darkness never goes from some men's eyes.


(Grateful Dead)


It's pretty quiet in the city of critters and we're ushering in the new era in with a handful of fresh sashimi. Young Fokker has really upticked his ordering skills and I've gotta give credit where credits due--the kid is rattling off fresh fish like it's a second language! Now, if only he'd stop talking about his co-ed infatuation, perhaps he'd get some work done. Relax, kid, she probably has a yearbook meeting or something!

The semis continue to act lethargic and, thus far, the news out of Morgan is relatively muted. I've heard from some that it's a "decent" tone and from others that the big buys sound horrid. More likely than not, the fundies are "there" (lower expectations, no visibility). As you know, I've been trading around some defined risk short side exposure and, from my perch, I haven't heard anything fundamental to augment that posture.

I continue to smell "hope" in this tape but I'm not positioned aggressively on the short side. Yes, I'm bearish--I've got one leg in my fur and I want to fade (read: sell) rallies for now. Still, I'm very light by my standards and the preponderance of my risk is defined. In other words, if the bears are scared and the bulls have hope, what does that tell you about the underlying supply/demand dynamic? Gulp!

As I write, the Minx is probing the downside and we're a snivlet away from testing that 5-day uptrend in the S&P. IF (big if) that breaks, the selling will likely pick up in pace. If, on the other hand, it holds (again), attention will likely focus back on the positive breadth and dry financials. That type of thinking is indicative of the reactive mindset as everyone's looking for a leader. It's also the reason that I constantly implore you to attempt to use prices to your advantage (both ways).

We've got some interesting levels starting to converge--S&P 840 (uptrend), NDX 1000 (former breakout), SOX 290, BKX 725--so lemme hop and toss my other hat back on. I'd tell you that I have this nasty feeling in my trading bones but I wouldn't want to scare the new Minyans in our midst. Suffice to say that my right hand is firmly up and trading my risk extra tight.

Let's see how the Minx reacts to trendline support (right now) and watch that dollar--it's getting hit.

I'll be back.

position in smh, s&p

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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