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Balance Beam

By

Eye of the tiger, baby!

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Good morning and welcome my son, welcome to the machine. The Minxy beast has been on a tear and, in the process, she's managed to weed out the bears like dandelions in a desert. The bullish bent surely has roots: the war skipped by, the fundies upticked (relative to expectations), the technicals broke out and the internals are firmer than a college cheerleader. If we're to view the tape via a constant assimilation of our metrics, the natural question is begged: What's not to like?

When trading, one of the first elements of a decision-making strategy is identifying which side of the market is the stream and which is the salmon. When operating from the short side (bear costume), the general process entails "shorting to buy" rather than "buying to sell." Conversely, when trading long (bull costume), that methodology is reversed.

I've been suspect of the rally and, well, it's been the wrong stylistic approach thus far. The thought process was lucid -- risk remains overseas, there's limited corporate visibility, the market is far from cheap and, over the past few years, it has paid (big) to zag and take the other side of conventional wisdom. Thus, we're left with a Minxy conundrum of whether this time is, in fact, different or if tried and trued bears need to be sucked in before the maximum pain can be administered.

I've got little doubt in my mind that this has been a bullish phase rather than a new bull cycle. However, for purposes of our everyday trading, that's a moot point. The only right answer is the one on the bottom line and, as such, the onus is on us to adapt. While our individual views differentiate our results, it is our discipline that keeps us in the game. That, in a nutshell, is why I undressed from the bear suit and took a step back.

My reasons for concern are still quite valid -- they've actually grown with higher prices -- but the beauty of our business is that there are fresh opportunities daily if you've got the right head on. If we see the little pictures that make up the big picture and practice controlled aggressiveness, the minutes turn into hours and the days take care of themselves. And at the end of the day, there are more important things to focus our energies on than flickering ticks. There's an entire world of beauty out there -- we've just got to find the balance to appreciate it all.

I'll be back with the daily walk-through but I wanted to pen these intitial thoughts to my fellow Minyans. This is a grinding business and it has the potential to suck the energy out of you if you're not careful. If there's one thing you take away from my morning post, it's to start this day with a positive outlook and the proper perspective. It will help you trade but, more importantly, it will lead to a happier life. And that's the best trade of all.

Good luck today.

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