We're Not in Kansas Anymore!
Minyans in the mountains? Fantastic!
Masquerading as a man with a reason
My charade is the event of the season
And if I claim to be a wise man,
It surely means that I don't know
Good morning and welcome back to the mirror's crack. Yesterday's scrimmage was a spittin' green image of the previous try by the Red Dye at trimmage. "Please mind the gaps as we all find our way," said Sammy the Snake as he slithered away, "there's all types of traps in today's minxy fray and I'd hate to see Minyans get carried away!" Will this be the Hump that we finally jump or can Boo and his crew stuff the bulls that are plump? It's Wednesday, my friends, so let's climb up the hill, and ready ourselves for a romp through 'Ville!
We constantly discuss the four primary trading metrics that serve as legs under the minxy table and the relative probability of success when they "line up." It's a constantly changing dynamic and one that requires monitoring if we're to stay current on the evolving landscape. Last month it appeared as if Boo finally had his ducks aligned, and he was feeling relatively confident. Charts were breaking, bellwethers were under distribution and Carrie--in all her glory-seemingly tossed her cookies.
A funny thing happened on the way to the prom, however--Carrie fell in love again. Professor Reynolds has been discussing this evolvement and while he's as humble as pie, I've gotta say that he has been "money" in his role as chaperone. There were some early signs (the surge in M3 money supply raised an eyebrow) but, for the most part, equity traders lagged and then tagged along their credit brethren. And as we tickle the '04 trendlines anew, we'll have to remain vigilant in our asset class trading radar.
I walked through a trade I reinitiated yesterday with the hopes that my public navigation adds value at some level. I own puts in select financials as A) BKX 98 (where we broke down) is staunch resistance B) the 50-day is on a collision course with the 200-day C) rising rates typically (if not eventually) lead the piggies to slaughter and D) they're high beta proxies for the market. As the potential for a new surge in "easy money" crystallized (or, at the very least, the probability upticked), I added some silver back to my portfolio (I had been trading the white lightening from the short side under $6.20). The thought process, so you know, is that I have relatively tight stops on both sides of the trade (defined risk) and any liquidity pump (that rescues the piggies) should buoy the metal complex as well. As always, Minyans, this isn't advice (we don't do that in the 'Ville)--we simply wanna teach people how to fish rather than ordering up a slab of sushi.
We power up the Hump Day pump to find the Jinx jammin' (+2%), Europe slinky green (FTSE outperforming), the dollar gettin' yesterday's greenback, the metals smelting a bit and the stateside futures flattish. The tenor of the tape has been bipolar and indecisive so stay on your toes and understand that Friday's expiration will manifest itself in today's (and tomorrow's) action. Our mainstay tells remain the same (with half an eye on crude) so let's get this party started right.
In Minyanville news, I'm proud to announce the first annual Minyans in the Mountains Summer Retreat! This is an opportunity to vibe in the Colorado mountains with your favorite Minyanville professors and further our educational mission with the critters. We've got a heckuva line-up (and a few more professors are likely to join) so please take the time and review the details. The "good" flights are filling up fast (and there's an early bird discount) so....yeah, that's the ticket!
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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