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Buzz & Banter


Todd always says that emotion is the enemy in this business, and I couldn't agree more with that aphorism. I reached an important emotional climax earlier this week, as I laid out painfully in my Going Home piece. Then I got away, got some perspective, and cleared my mind.

My first reaction in reading Fleck's latest blurb was some amount of relief, because some other folks smarter than I were sensing the same level of optimistic frenzy that I am. My second reaction? An impulse to buy some puts or to lay some shorts out there. After all, I might be wrong for a day or two, but this level and pace of buying frenzy often (but not always) destroys itself. It'll be a profitable trade within a reasonable time frame.

But I immediately thought back to a few days ago, about the strain of the having the market move against me. Even then it was a low-probability move. But it still went against me. That emotional shadow still lingers, however faint time and some perspective has made it, it's still there. So I am doing nothing. I watch and I wait.

If this move is due for a tradeable pull-back (5% to 10%) before powering higher, we'll have time and price to trade successfully from the short side. The bulls aren't going to go straight back down from here. And if Fleck is right and the second half will provide a more meaningful reckoning between economic reality and the stock market, well, we'll have even more time and price from which to trade the short side. Either way, top ticking the markets isn't necessary.

Emotion made me want to stretch to get close to the top tick. Perspective has holstered that impulse. I watch. I wait.

No positions in stocks mentioned.

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