The Herky Jerk
He's such a JERK!
Everybody's favorite southern son, Navin R. Johnson, swung by Minyanville (on his way to Mama's) to grab a corn dog and get a read on today's tape. As we noshed, we punted around some midday musings. It went a little something like this:
Navin: What the heck is going on here! They hates these cans! There's cans everywhere! Stay away from the cans!
Hoofy: Relax, dude, traders got caught the wrong way this morning and this is a simple shaking of the tree. Once we fill those technical gaps (S&P 860 and NDX 1020), it'll calm down a bit. Remember, three steps forward and one step back.
Boo: Don't be a jerk, Hoofy! Remember how pessimistic everyone was during the duct tape low? They were equally optimistic during the statue high. Bulls are above 50, the VIX is below 30, the economy sucks and earnings (or lack thereof) are quickly approaching. How long do you think this shell game can continue? I haven't been this excited since the new phone books arrived!
Snapper: Well riddle me this, Boo, if it's SO bad, why does the breadth hang in there?
Boo: You got me. But it's worth mentioning that the downvolume/upvolume is 2:1 in the S&P and 3:1 in the Nazz. You've also got the banks and brokers redlining stochastic sell signals and if you haven't figured it out yet, the tape aint goin' nowhere without the financials.
Hoofy: Well, I'm gonna go then! And I don't need any of this! I don't need this stuff and I don't need you. I don't need anything except this ashtray. And that's it. And this paddle game. The ashtray and the paddle game and that's it. And the remote control. The ashtray and the paddle game and the remote control. And that's it. And Fokker! Can I have Fokker?
Toddo: You don't want Fokker -- trust me -- he's a snorter. And don't be so flipped out, my friend, just be disciplined. It's hard to discuss a blanket methodology because each Minyan has a different risk profile. I would only stress the importance of one's time horizon and crafting a proactive strategy. Chasing the tape's tail all day is no way to live.
Snapper: I'm gonna bounce back and when I do, I'm gonna give you a rally so big it's gonna make you puke!
Toddo: I don't wanna puke, dude, I just want us all to find our way. That goes for bulls, bears, turtles, cows and snakes. There's many ways to skin a Minx. You could have bought the opening and sold the statue. You could have shorted the statue and covered the dip. Or, you could have methodically scaled into exposure as a function of price (either way). Just because I'm playing it short doesn't mean you have to. Remember, Minyanville is about education, not advice.
Hoofy: What are you watching into the close?
Daisy: Don't ask silly questions, honey, he already told us! The dollar (starting to slip), bonds (holding their bid), crude and gold (higher), our technical levels (filling), the financials (battle ground), the retailers (relatively soft), and the internals (negative but holding). Also keep an eye on Microsoft (MSFT:Nadaq), IBM (IBM:NYSE) and the Internet names as sentiment reads.
Navin: Hey Daisy, I know this is the first time we've talked, but do you think the next time you make love to your boyfriend you can think of me?
Toddo: Alright -- that's enough. I've got to get back to the tape and find my way through the rest of this muck. Thanks for stopping by, Navin, and please give my best to Marie.
With that, we broke from lunch and made our way towards the door. There were two hours left in the session and, after everything we've seen today, we all knew we'd have to stay on our toes. These are tricky times, fer sure, and it's not for the meek. Keep your head up, think positive and always allow for a margin of error when trading.
And good luck my friends -- you can do it.
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 email@example.com.
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