Expect to see some posturing in front of the Cisco Kid!
Many is a word
That only leaves you guessing
Guessing 'bout a thing
You really ought to know
So there I was...sitting at my computer late last night searching for words that would aptly capture the recent action. After an hour of nothingness, I climbed from my turret and walked into MVHQ, where the critters were playing a mean game of Texas Hold 'em. "I've done it, I've finally run out of words," I sighed, unable to hide Zack Mayo moment, "I feel like I've arrived at the literary equivalent of the end of the universe!"
Hoofy, wearing a green visor with rose-colored glasses, dealt the cards without missing a beat. "Bad news that doesn't matter speaks volumes," he said while staring into Boo's eyes, "You should know, Toddo, you're the one that taught us that!" It took me a moment to place his perspective and, as my mind migrated back to the S&P auto punt, I realized why he was feeling so brazen.
I walked across the room to grab a slice of cold pizza and collect my thoughts. I knew there were plenty of bulls who shared a similar optimism, jockeying between the relative traction in General Motors and an on-the-surface upside surprise in jobs. In the absence of clarity, traders default to the laws of inertia. And when critical mass builds, reactive types file in and pile on the latest trend.
"Hope springs eternal," mumbled Boo as he studied his cards, contemplating whether to cut his losses, "Imagine how giddy the bulls would be if the major averages weren't swimmin' in crimson. Just think, Toddo, how emboldened Hoofy would be if we actually took out resistance at DJIA 10,400 and put NDX 1460 in the rear-view mirror!" I swallowed hard (there's nothing wrong with a little pizza on our time), grabbed a fresh slice and walked over to the game.
"This isn't easy," I offered as I put my hand on Boo's shoulder, "A confluence of crosscurrents seems to be pushing the tape around with relative ease. All the while, 8000 hedge funds are cannibalizing each other's returns and crowding a trading dynamic already mired in compression." The critters were quiet as they watched me noodle my thoughts and I carefully weighed both sides of the equation. In a world where metric assimilation dictates profitability, the street signs seemed to be all over the place.
"I certainly respect the tenor of the tape, particularly in light of the structural smoke." I began, shifting my gaze among my five metaphorical friends, "And I'm quite conscious of that subtle shift in perception as we dance towards the Cisco Kid (CSCO) tonight. Despite the relative jig during the last few weeks, however, we're still mired in a slew of key resistance zones. The only difference, from a chart perspective, is that we've effectively worked off the oversold condition that was buoying the bungee."
Hoofy chuckled aloud, almost mocking my caution. "Look man," I said, facing the bull, "what you do isn't a function of what I think. You made that quite clear in 2003 and you remind Boo of your moxie every chance you get. All I'm saying is that you need to see both sides of the trade and map out a suitable horizon. Can we rally? Sure-perception dictates reality for the flickering ticks. I just need you to be aware of the uber-low vols (no fear), remaining resistance (10,400) and hidden potholes (in the financial space)."
Snapper began dealing a fresh set and I realized that I lost their collective attention. "I'm outa here," I said as I grabbed my jacket and flung it over my shoulder, "I'll catch you cats in the morning." As I slowly slid towards the front door, the chatter picked up behind me as the critters shared some laughs. As I waited for the elevator and rubbed my tired eyes, I turned to see Daisy standing by my side. "Enjoy your journey tonight," she said as she gave me a warm hug, "Tomorrow is a new day, fresh with promise and perspective."
And so it is...
Good luck today.
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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