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The Alabama Slammer

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Anybody wanna make a bet that the tape doesn't end at these levels?

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Thirty two teeth in a jawbone
Alabama cryin for none
Before I have to hit him
I hope he's got the sense to run

(Grateful Dead)


It's another day in the Minyan fray as ticks flicker and the muses play. Fokker, who's been invited to tonight's mini-Minyanfest, has been dutifully scanning the screens in search of actionable ideas. What's he looking for? Extended names that are in the latter stages of a blow off type move. Once he fields 'em and tosses 'em over, I'm pricing out put spreads that can (potentially) set up for marginal exposure.

Ole you say? Perhaps. As Tony is quick to point out, the "charts" don't support an aggressive stance on the short side. The other side of that coin is what we've been weighing in our crowded keppes: Don't the technicians HAVE to give the tape a final and definitive stamp of approval before a reversing course? That would be consistent with a path of maximum frustration and par for the Minxy course.

If this is, indeed, the final stage of the "denial, migration, panic" pattern, you must weigh the potential for further jig vs. the possibility of lower prices with which to trade. There's no guarantees in this business, only calculated probabilities, and an assimilation of our trading metrics is decidedly mixed. The fundies don't warrant this move, the technicals (while extended) are constructive, psychology is manic (which is bullish until it's bearish) and the structural metric is "OK." In other words, the musical chairs may continue but keeping one cheek on the seat isn't a bad idea.

For the more active Minyans among you, DJIA 9000, S&P 980 and NDX 1210 have been areas of support today and those are the zones to monitor. If they hold these levels towards the close, the path of least resistance is clearly higher. If they start to fail, a la Monday, it'll give traders food for thought as we edge towards the pending catalysts. Good luck as you find you way and just remember, you're a Mellon!

Finally, please understand that the Minyanship is a diversified bunch and, as such, there's likely to be content that's either too advanced or too "simple." We do our best to balance and address both sides of the spectrum while furthering the educational and philanthropic nature of our efforts. We started Minyanville and The Ruby Peck Foundation for Children's Education to make a difference. With your help, we're edging closer to that goal every day.

Fare ye well.

position in qqq, 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 todd@minyanville.com.

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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