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Carpet Bagger

By

A big thanks to the Reamers!

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Well, you don't know what
You can find
Why don't you come with me little girl
On a magic carpet ride

(Steppenwolf)


Ashton Fokker, cabana boy extraordinaire, just peered his head over his screen and asked me what I was thinking. That's a loaded question, young man, as the wheels are spinnin' mighty tight today. I told him (with a straight face) that I'd share my thoughts if he promised to return the bag of dentures to south Florida. He complied, so here we go...

First things first, I'm hearing from a trusted contact that his (sell side) firm saw a bunch of short selling yesterday (the highest level in a month outside of the semi and telecom space). That probably contributed to the underlying bid this morning and buoyed the first dip. The tone has steadied after an active morning with the brokers, trannies, biotechs, cyclicals and retailers all exhibiting decent relative strength. The semis, on the other hand, are sorta heavy as chatter of stagnant capital spending makes the rounds.

With July expiration around the corner (that was fast!), it's not too early to start talking about the negative gamma in the marketplace. I've always been of the opinion that these events are ungamable and the net/net is a volatility exacerbation (feel free to chime in, Professor Succo). My point--and yes, I have one--is that the combination of technical breakouts (NDX, XBD), earnings uncertainty, massive complacency (cockiness) and structural unknowns will meld into a wild ride into next week. Stay disciplined and try to structure your risk such that your winners run and your losers are defined.

Am I bullish or bearish? That depends largely on the horizon we're discussing. I could "see" further upside in the near-term but remain resolute that this is gonna end nasty. I've got some "relative" longs on (via calls) and some requisite shorts (via puts). In between, I'm day trading to augment my risk profile and trying to secure some peripheral profits. Keep in mind, please, that my posture is ever-changing and I'll pounce like a Zoebird if the situation warrants it.

Finally, and a day late, I'd like to offer my warmest thanks to Scotto & Megan Reamer (and pops Jack) for their hospitality last week. While they tended to the important stuff, they allowed me to stay at their place in Crested Butte and remojonate. I can't thank you guys enough....not only for your kindness, but for the perspective I gained from your company. Ya'll good Minyans and the critters are sendin' ya all the white light they can muster!

As always, I hope this finds you well.
positions in gs, mwd, bsc

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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