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Strait Flush

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Boo's your daddy?

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Well it's been money for muscle another whirligig
Money for muscle and another girl I dig
Another hustle just to make it big
And rockaway rockaway

(Dire Straits)


The afternoon ride is swelling with pride as the bulls try to push through the technical divide. We've discussed these levels for quite some time--the downtrend lines in the three sisters, rip cord resistance for the piggies and the 200-day box for the SOX. If Hoofy can power this pony through this zone, the Matador gore will be in full effect. If Boo can tighten his attic screws, the Red Dye cry may avoid the fry.

Discipline trumps conviction--that's one of our primary trading commandments and the one that will ultimately differentiate our performance. I've been approaching this market from the short side (albeit gingerly) and scaling some defined risk puts into this exact zone. Brian Reynolds constructive inputs (along with relatively muted conviction) surely mitigated my aggressiveness but I'm still positioned that way. Hey, I'm not always the best trader but rest assured that you'll always get my honest input.

Technicals aside, there are some noteworthy elements that are worthy of a mention. Crude tested the $38 support level this morning and has steadily climbed since (I'm watching this commodity as further jig will continue to impact corporate margins). That, unforeseen geopolitical issues, fundamental deceleration and structural illiquidity remain potential flies on the ointment but as is often the case, they're all getting swatted by the green screens.

The net/net is that I will respect (not defer) to the price action and flatten my deltas should my levels trigger. I don't believe the hype but timing is usually the single biggest determinant of profitability. The goal, as always, is to be in a position to prosper when the fat pitch comes down the pipe. I will offer that volatility is cheap and I, for one, would like to establish further gamma despite the seasonal tendencies. For if nothing else, this summer promises to be a little nuttier than Hamptons past.

Fare ye well into the bell

R.P.
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