Y2K I Say!
This is udderly fantastic!
I was dreamin' when I wrote this
So sue me if I go too fast
But life is just a party
And parties weren't meant to last
Alright, is anyone else experiencing a serious sense of vuja de? I'm watching the action in some of these speculative sectors and I can swear that I've seen this movie before. The last legs of a tradable move are typically the most vicious, and if form holds, we're edging ever so closer to a turn. The only question in my mind is whether S&P 950 equals BKX 800 on a chart. In other words, does the Minx need to give the technicians the breakout nod before the people all say roll over?
The "flip side" to the "we're in the midst of a blow off phase" argument is that this time IS different. While I seriously doubt that we've entered into the realm of a new bull market, I appreciate that perception is reality in our business. As long as people think we're in the clear, they'll buy stocks and attempt to play performance ketchup. Think of it as a game of hot potato at a Weight Watchers convention -- and pass the salt!
What am I doing besides sniffling and sneezing? I'm trying to use prices to my advantage while appreciating the power of the people. I came in rather light (as a function of my mini-respite) and have been patient for the most part. If the biotechs are a leading indicator for tech and the banks are the same for the big board, it stands to reason that there's a little oomph left for the tape. Still, I'm not a believer -- shocker there! -- and I couldn't help nibblin' on some defined risk puts in uber-extended sectors that are tickling resistance.
The one point I would like to reiterate is that of time horizon. If you're playing for an intermediate-term move, the tick-by-tick action shouldn't concern you. Conversely, if you're a day-trader, the big picture isn't a focus. Make sure your risk profile and trading horizon line up and stay on your toes. The quickest way to lose money is to trade from your heels.
With the exception of durable goods (expected to be down. 1%) and a few conferences, tomorrow's a light day on the news front. Make sure you're comfy with your overnight risk profile such that you can justify your risk. These days are long enough and the last thing you want to do is spend your evenings thinking Minxy thoughts. A'ight?
Good luck into the close and as always, fare ye well.
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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