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Allergy Season


If (big if) we're to trade appreciably lower today, we needed an early visit from Snapper!


Like a feather in a whirlwind
Blow away
Just as sure as the world spins
Blow away

(Grateful Dead)

He's a pesky little turtle, eh? Young Snapper sneaked his beak into the morning bleakness and freaked out the bears something awful. We discussed the incremental "pressing" earlier (IM indicator) and, sure enough, Snaps came along and gave 'em a hug. Shocking? Nah, not with sentiment so manic. The question remains, however, where do we go from here?

We've learned, through the years, that bottoms are points and tops are processes. What remains to be seen is whether we need a capitulatory blowoff (higher). Typically, after an emotional sequence like we've just seen, the "I CAN'T STAND IT ANYMORE" spike is the tell-tale sign that it's over. However, much like we saw mid-March, price action sometimes isn't as "telling" as we would like. As such, the onus is on us to find a strategy that's an extension of our view while allowing for a margin of error.

My current approach allows for both scenarios as I've been using strength to scale into June puts, trading "around" my gamma and setting tight stops on my day trading risk (both ways). I'm trading with both legs in my bear costume (50% conviction on the short side) and, as it stands, I'm comfortable with that posture. If we rally from here, I'll scale into further exposure and if we fail miserably, I'm represented. Either way, I have a strategy mapped out and I've removed emotion from the mix.

It's worth remembering that the most vicious rallies occur in a bear market and when we look at history, I don't believe this will be any different. As a matter of fact, this particular juncture may be setting up as the most brutal head fake of them all as EVERYONE has seemingly climbed on board the Hoofy express. The parabolic nature of the rise has forced the hand of money managers to pay to play and, if form holds, the herd's slaughter is simply a matter of time.

Again, that may not be today's business but as I think it, I want to write it. The daily action is, thus far, hangin' tough and my eyes keep migrating towards the brokers (as a key trading tell). The macro indicators, meanwhile, are equity friendly (first time in a bit) and IF they can continue (what I believe to be) a countertrend rally, it could spark the final phase of this move. Time will time, Mon Frere.

As always, I hope this finds you well.
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No positions in stocks mentioned.

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

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