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Dark Side of the Moon


Did you say trendlines.... or tan lines?


I hear hurricanes blowin'
I know the end is commin' soon
I fear rivers over flowin'
I hear the voice of rage and ruin

(Creedence Clearwater Revival)

Good morning and welcome back to the pearl jam. With their backs against the support wall, Hoofy's heroes came out swingin' yesterday and staved off Boo's bandits. It was a spirited showing by the bountiful bovine and, after a string of sorry sessions, they once again took the baton. Can the bulls carry the mojo through next week's quarter-end, or will the bears scare the Minx and trap the tag-a-longs? It's freaky Friday in Minyanville and you know it's gonna get crazy, so let's get on with the show... come on, let's go!

The age old adage is that if there wasn't risk, it'd be called winning rather than trading. Still, managing that exposure is a critical element of success. I've been doing this for 13 years, and while I've surely paid my dues, I continue to learn and grow each day. I dutifully monitored our environment this quarter but, when it was all said and done, the structural element was overwhelming. The rally wasn't about the fundies and historically reliable tools were rendered obsolete. It was about liquidity, pure and simple, and it taught a humbled Boo to respect the power of a political agenda.

A more recent assimilation of our metrics offers a mixed bag with a negative bias. The long-term trendlines have (thus far) held, but we're wading through lower highs (from last week) and some potential dandruff. The crowded bull camp is a fire hazard, but anxiety has a way of feeding on itself. The market ain't cheap, but it's been frothier and there's danger in measuring excess. And while the derivative story is a potentially destructive issue, the Elmer liquidity injection is washing the worry away. With so many crosscurrents whipping about, how the heck can a critter sleep at night?

While Minyanville is an educational experience, I often share my (humble) views with hopes that it adds value to your process. Sometimes I'll be right, other times I'll be dead wrong and, still others, I'll simply be early.

With that said, if you were to ask for my assessment of our stock market, I would offer that it's a disaster waiting to happen. Too strong of a phrase and no need to say that? Perhaps, but while I'm not sure if this ends in a car crash or a cancer, I can "see" this more clearly than anything I've ever seen in my career. The timing is elusive (naturally) but I've got little (if any) doubt as to the ultimate outcome. And if I didn't honestly communicate this to my fellow Minyans, then I would be doing a disservice to us both.

I "see" a bad moon rising and I'm of the belief that the Fed does too. The stock market is the single biggest thermometer of American psychology and on the back of a war -- and in front of an election -- they've made a Herculean effort to buoy equities. While they've surely achieved their desired (short-sighted) results, my fear is that they're simply prolonging the inevitable pain. For when the grizzly awakes from this particular hibernation, he's likely to be in a rather nasty mood as he shoves bitter pills down the throats of the bulls.

With that said, and if we're to focus on the journey rather than the destination, we must try to make hay while the sun shines. That can take many forms and there's a handful of stylistic approaches that act as an extension of our risk profile and time horizon. For my part, and as I power down and eye the back nine, I'll be enjoying my vacation week with a relatively flat pad and a handful of new books. Our business demands that we're consistently "on" and when we're not balanced or lack perspective, our decision-making process will suffer. Sometime it's our time away from the tape can lead to the most profitable trades.

In Minyanville news, I would like to say that it's been an honor and a pleasure to have worked with my friend Charlotte-Anne once more. Throughout the last three years, at this venue and others, she's helped to shape my disparate thoughts into a collection of cohesive columns. Whether it was the Ruby Chronicles, the Sept. 11 tragedy or my normally abnormal thoughts, I'm a better writer for having been in her company. Best of luck in your new endeavors, C-A, and please swing by on occasion to chill with the critters!

Good luck today.

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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

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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