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A Thorn Scorn


There's a sellers strike today!


Run, run, run for the roses
The bigger it opens, the sooner it closes
Meddle, meddle, friend of mine
All good things in all good time

(Jerry Garcia)

Well Fokker, here we are. Memorial Day is behind us, green screens are in front of us and a long, hot summer awaits us. While the great debate about the state of the tape continues, Hoofy's heroes are marching right along. The biotechs and semis are up more than 4%, the rally is broadening, breadth is impressive and we're tickling the recent highs. What's not to like?

One of the great ironies in our business is that players tend to focus on risk when the market is lower. When we're in rally mode, as we are now, the concern shifts to performance anxiety and a "fear of missing." That's a big reason why sentiment surveys serve as contrary indicators and they've historically offered good "signals" when we're at an extreme (as we are now).

When I think back to the handful of trading tops we've witnessed, there are ominous similarities to our current juncture. The mocking bulls are out in force, everyone (bears included) wants to buy the first dip, the technicians can point to breakouts and the bears are few and far between. Remember, it felt "different" each and every time we reached an apex in the past, and history has a habit of repeating itself.

Before I left for my mini-respite, I opined that an interim rally (S&P 970) wouldn't shock me, and it still doesn't. I respect the powerful (toxic?) combination of momentum and sentiment and, truth be told, I'd rather see an exhaustive rally (before a turn lower). I think we've begun to see signs of the dreaded "blow off" in the biotech and Internet space and that's probably the first sign that an end is near. With that said, I would remind you that timing is everything in this business and being a little early can cause a lotta pain.

Anyway, those are my thoughts regarding this current phase. I've spent a lot of time reading through the bull case, as you ALWAYS want to see both sides of any trade. You can play this tape in a number of ways and while some may choose to climb aboard, others will opt to use prices to their advantage and scale into exposure. I can't tell you what's best for you, my friends, that's a question only you can answer.

At the end of the day, you've gotta live with your choices so remain lucid, remove emotion and think positive. It's easier said than done, I know, but just do the best you can and don't drive yourself nuts. And smile, Minyans, summer's here!

As always, I hope this finds you well.

position in 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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