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Random Thoughts


The reaction to news is more important than the news itself.

  • We edge into the afternoon with the S&P on the bottom end of an all-important zone. As many Minyans know, I entered today's fray skewed slightly short, albeit nothing that would warrant the fur. I also have positive gamma, or "long convexity" (options), so the 10% drop in the VXO does not escape me.

  • While I respect my tea leaves, namely the breadth (3:1 big board), financials (the BKX is back at the 200-day and the brokers have a bid), the nets (up 2-3% across the board), the potential for monthly inflows and the emerging markets (EEM +1.5%), I added a round of index puts against my core longs and will lean against the aforementioned level. I may be spitting in the wind but our goal, as traders, is to attempt to use prices to our advantage in the context of defined risk.

  • Other guides from where I'm sitting include crude (-2.3%, whereas a rally would indicate increased geopolitical tensions), GS $210 (a level of resistance for the biggest baddest broker in the land) and the homies (which are thus far back above our aforementioned kill zone).

  • Can you imagine getting married at the FOMC? "I do…contingent on continued prosperity. However, I reserve the right to reverse course and should unwanted influences begin to emerge."

  • Tapes that are strong all day tend to end that way. This, we know, particularly when breadth is skewed 2:1 positive. I'm unsure if a reversal is today's business (it doesn't feel that way) but, with the VXO trading with a 12-handle, I don't mind accumulating volatility.

  • I see SunMicro's break of the sexy six level but I'm still there with my "core" vs. other short exposure. Undisciplined? Rationalization? Jerky? Nah, I use technicals as a context rather than an absolute trigger. There are four primary metrics---fundies, structural, psychology and technicals. Good charts certainly help but they are by no means a panacea.

  • Ya gotta hand it to the Gators for back-to-back nets and a pigskin trophy to boot. Nothing but respect, Mon, for the best college sports program in the land.

  • The reaction to news is more important than the news itself.

  • It's a short week as we've got holidays on both sides of the ride. Trade as you will and trade as you want but ready yourself for increased volatility and thinner markets. The last thing you wanna do is ruin the important stuff with silly mistakes or unnecessary losses.


position in sunw, spx

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

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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