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Rocky Mountain High


There's no place like home!


Let my inspiration flow
in token lines suggesting rhythm
that will not forsake me
till my tale is told and done

(Grateful Dead)

Good morning and welcome back to the days of our lives. Having spent some time away from the fray, I was reminded how easy it is to forget that a world exists outside of our own reality. I'm not talking about leading a selfish existence although, at times, we're all guilty of that. I'm simply offering that there's more to living than how we live. In an effort to regain some perspective, I collected the menagerie last week and vacationed in a small town named Crested Butte, Colorado. There, we spent some time remembering and forgetting, thinking and not thinking, being and letting be.

While some may think it odd that I converse with a handful of critters, I, for one, am happy they're around. Not just for their metaphorical representation, but because they serve as active reminders of the human condition. They're purposeful, yet they sometimes stray. They're passionate, but vulnerable to self-doubt. They're fiercely independent, but equally aware of the importance of teamwork. And, like all of us, they make mistakes and grow from them.

There's no shame in admitting that these last few years have been difficult. I've felt it on many levels and, through my interaction with the Minyanship, know that many of you have struggled too. The easiest thing to do is look back and lament but true and healthy growth is only achieved by letting go and looking forward. Sometimes that path is daunting but, in many ways, that's what makes it worthy and purposeful to begin with. It is with that mindset that I'll ask you to join me as we forge ahead and find our collective way.

As a trader, my role is to adapt to the Minx and adhere to my disciplines. I admittedly strayed from that path this past quarter and allowed my bearish big picture view to dominate my (short term) stylistic approach. I'm not dwelling (that's wasted energy), I'm simply acknowledging a subtle yet important distinction in risk management. A trading time horizon and risk profile should always coincide in scope and duration and, quite simply, one facet cannot operate effectively without the other.

With that said, I'm entering the second half of this year with some pretty serious concerns. I wish I could sugar coat how I feel but that wouldn't be forthright or consistent with who I am. I understand that the stock market is a leading indicator and the economy could conceivably offer upside validation. In my humble opinion, however, the only reason that the Minx has been mountain climbing is the massive liquidity injection. While this infusion may continue to lift the rising tide and swell the animal spirits, there's a host of reasons to keep an eye on the life raft.

I love my country but remain of the opinion that too many people have confused patriotism with blind optimism. While I believe that this administration will leave some rather muddy footprints in the pages of American history, lets leave electoral agendas and their desired legacies for another column. Looking at the ledger of reason, it's inconceivable that the biggest bubble in financial history has already been digested after three short years. Once this rally phase exhausts itself, I think that the gravity of the situation will start to sink in. Valuation levels remain close to historical cycle tops, the collective sentiment is giddy with phantom recovery excitement and the triple D thesis (debt, derivatives, deflation) continues to lurk in dark corners.

I strive to walk into each trading session with an open mind as I know that profitability has no bias. I've clearly been too bearish (read: wrong) these past few months but maintain tremendous clarity regarding how this will ultimately play out. Timing remains elusive, however, and if the modus operandi is injection until election, there is a potential that another mini-bubble will form. If that happens, it will only prolong (and exacerbate) our financially dysfunctional destiny. In my most humble view, time is the only cure for what ails our system and how we spend it will dictate our individual fortunes.

In the meantime, and in the interest of viewing the big picture as a series of little pictures, I powered up my systems last night and pulled up a chart of the S&P. The vicious head and shoulder "head fake break" notwithstanding, the trendline (from the March lows) that "broke" two weeks ago has now tested (and failed) at previous support twice. Watch the June highs (S&P 1015ish and NDX 1265ish) as potential trigger points (higher highs) if the bubble gum fun is to continue.

Speaking of time, I've gotta tell you that a week away did wonders for my soul and spirit. While my vehicle of choice was a mountain bike and some single track trails, it doesn't matter what you do to get away as long as you enjoy doing it. If you live to work rather than work to live (as I did for the better part of this year) balance and perspective become buzz words rather than guidelines. Enjoying the journey is so much more important than reaching the destination, for once you get there, the ride is already over. It's not always easy to see but, at the same time, it's never too late to start.

Good luck today.
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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