"Its gettin hot in here (so hot)
So take off all your clothes
I am gettin so hot,
I wanna take my clothes off "
The minxy fray is here and now as we dab the wetness from our brow. Yeah, it's a scorcher today in the city of critters and you can almost smell the butterscotch on the sidewalk. The saucy soiree is also starting to seep into the collective mindset as we edge into the busiest earnings week of the year. Hot? Bothered? Sticky like a bun? Shake it off, Minyans, and come with me as we chill in the 'Ville.
The first few (post expiration) hours are typically noisy as traders square their trading risk. Be that as it may--and it may be considerable--a few themes are starting to emerge in today's action. First and foremost is the N's over S's action that is dominating my (8) screens. The financials, trannies, retailers and cyclicals are draped in red while the NDX is green instead. The tenor is more Red Dye than Matador City, mind you, but the relative outperformance is notable.
My eyes are scampering between the bond market (firm), metals ('there'), Taser Int'l (TASR:NASD) (speculative proxy), oil (above $38/brl) and biotech (+1%). I've been nibblin' ever-so-gently on gamma as I continue to believe that there is a disconnect between what is and the perceived level of future movement. Yes, I have a downside bias but this opinion--and that's all it is--speaks more of the potential for an outsized move vs. relative expectation.
There's much to do and we should all spend some time identifying our objectives before the wild ride begins in earnest. The last thing you wanna do is step into the middle of a live game without a strategy or plan of action. That puts you on your heels and as we've learned, that's the last place you wanna be when trying to proactive position yourself. I know you know--but it never hurts to hear it again.
As always, I hope this finds you well.
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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