Nightmare on Wall Street
Have a peaceful weekend, Minyans, and fare ye well!
You thought you was the cool fool
Never could do no wrong
Had everything sewed up tight
How come you lay awake all night long?
Alright, this is beginning to become a concern. It's no longer enough that I "sleep eat" and awake each morning to find M&M's littered throughout my house. During my most recent midnight run, there's compelling evidence that I actually took the time to microwave a handful of chocolate chip cookies! I schvitz you not...the microwave! Strange things are afoot at the Harrison household!
What's driving my hunger for nocturnal nourishment? Maybe it's the energy we're expending each day as we battle the Minx. These are trippy times in the city of critters and I haven't found many Minyans who are having a good time. Hoofy? He's been faded more than a pair of Levis this week. Boo? He can't seem to muster any mojo on the sell side. It's the very definition of frustration and, if we're not careful, it can lead to painful and rash decisions.
While I remain of the (humble) opinion that there's some meaty downside in our midst, I admire (and respect) the effort of the bulls. They've managed to make a stand in the one complex that matters most: the financials. Despite the wicked volatility this week, the BKX is basically unchanged and has (thus far) stabilized the tape. Yes, I'm long puts in many of these names and yes, I think they're ultimately acne bound (teenagers) but, man, they're making Boo work!
Sometimes, when it gets hairy during the intraday, I like to look at longer-dated charts to gain perspective. I just pulled up the one-month gips (charts) of all the major sub-indices and it became pretty obvious why these levels are such battlegrounds. There's a LOT at stake, both camps know it, and neither one of them is gonna go down without a fight.
While I can "see" both arguments, the tie goes to the bears (in my opinion) as a function of the optimism (bulls>50), VIX (28!!!) and event risk. I "want" to be more aggressive and, truth be told, I've been strapping 'em on a bit intraday, but I'm being very tight with my risk parameters. All the while, I'm desperately trying to remove emotion and not fall prey to the human frailties that sometimes cloud the trading process.
Next week ushers in April expiration and the meat of the earning's season so hang onto your hat. The recent lethargy will either be viewed as a pause that refreshed or the exhaustion of the upside and we wont know, for sure, without the benefit of hindsight. Take a deep breath before finalizing your risk profile and please allow for a margin of error in your approach. Nobody, and I mean nobody, knows for sure what tomorrow may bring.
I'm gonna bid you adieu and manicure my portfolio before turning my attention to our two-day respite. These weekends are well-earned, my friends, and I encourage you to take advantage of the down time. Too much work and no play makes moody Minyans of us all, and that's no way to wade through life. You'll never, ever experience the weekend of April 12,2003 again so don't waste it with worry -- that's a bad trade.
Have a peaceful weekend.
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 firstname.lastname@example.org.
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