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Phantom of the Fed

By preservation is the first step towards prolonged profitability.


It's like this and like that and like this and uh
It's like that and like this and like that and uh
It's like this and like that and like this and uh
Dre, creep to the mic like a phantom

(Dr. Dre)

1-2-3 and to the fo', Big Bennies on the tape and the bears are at the do'. Following the holiday shortened skeletal week, the Minx emerged on fragile footing to fend for herself on a most minxy Monday. The action out of the gate was tepid, at best, as Hoofy rolled down the Street to find flashing red internals and technical intersections. And while the piggies tried to steady the poke, they turned tail and began to flail when Boom Boom offered an honest assessment of the prickly picture. Talk about bustin' like a bubble, the Matador Crowd was punch drunk with gin and juice by the time Bennie took the flo' and stole the sho'.

The truth hurts but yesterday's admission may have been a forthright attempt by our newly crowned prince. We sometimes jest about the misinformation that we're fed daily, assuring us that there isn't inflation, 4.6% of our population is unemployed or that all is well in the world. I would like to believe that angle--trust me--as the critters would fare quite well in a 1995 reprise. Alas, a smart man once told me to expect the best but prepare for the worst and this Minyan is following that script. It'll cost me money in a mo'mo' go'go show but it'll keep me in the game if the wheels fall off the wagon.

There is a bull case. And trust me, if we turn to tickle fresh highs again, you'll hear it from the roof tops. And despite the vicious tug-o-war we saw in May, the technical truth is that we're still stuck in the middle of a rather large range. S&P 1260 (200-day) and 1246 (range lows) will undoubtedly embolden the bulls despite the fact that the bungee is incrementally frayed. And as there are secular, monolithic forces in play (watch the dollar), we must respect a probability curve that stretches across the entire spectrum of two-sided performance. Anyone who tells you they know what the tape will do shouldn't occupy your time. The truth is that the script remains unwritten and the onus is on us to assign proper probabilities with dutiful discipline.

Welcome to the dance between the elephants, where the steps are uneasy and a bubble of funds dare to tread. We can spend seven ways till Sunday digesting the 'flation equation but the truth is that we're simultaneously sipping several cocktails, intoxicated by the promises of better tomorrows while mired in the dependency of yesterday's debt. Stuck in the middle are spies like us, those who pride themselves on solving Da Market Code despite the flickering ticks of years gone by. Yeah, it takes a rare breed to trade through this tape and Mr. Darwin would indeed be proud.

We enter a devil of a Tuesday--the only 06-06-06 that any of us will ever see--with the world on edge and the forests echoing with laughter. I grinded through a case of the Mondays yesterday, paring a slew of my metal upsides and their attendant financial counter-parts. It left me with a handful of profits, some irking 'what ifs' and a much tighter risk profile than I've had in recent weeks. I've embraced the notion that "capital preservation is the first step towards prolonged profitability" and, while that cost me coin in momentum markets passed, I'm not going to abandon that steady methodology.

We power up this devil of a pup to find Europe awash in a crimson tide, the dollar bouncing 50 bips, metals gettin' smelted and pre-market futes steady as she goes. I'll walk through my actionable thoughts in real-time on the Buzz, for better and for worse and with educational intentions. Suffice to say that there are alotta boisterous fans in the crowd and I'm looking to jab, rack up points and get back to my corner with my health--and profits--intact.

Good luck today.


Positions in metals, energy

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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