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The Erogenous Zone

By

May peace be with you!

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Didn't I tell you
What I believe
Did somebody say that
A love like that won't last


(Sade)

The love affair continues as traders probe the G-Spot (S&P 1000) in search of a reaction. The smitten kittens have thus far bitten but, as we all know, relationships take work. If the Minx is to hug and squeeze the shorts, she'll need to establish trader's trust with an upside thrust.

The Semis and Industrials both did their part today and we must respect the fresh signals. I don't believe the hype but I certainly respect it and have adjusted my risk profile accordingly. My big picture bear reasoning is still very much in tact but, by adding a handful of cheapie calls, I now have the risk profile equivalent of a big "V" (positive gamma). I have, in effect, bought time (cheaply, I might add) and protected Boo should Hoofy gain momentum.

The action should pick up tomorrow as Beeks releases the housing starts (exp. 1790k), building permits (exp. 1800k) and Wolverine confidence (exp. 91.5). In addition, we'll get earnings from both Home Depot (HD:NYSE) and Hewlett Packard (HPQ:NYSE) and that should have some ripple effects through both the N's and S's.

I've spoken to a lot of traders today and the angst levels are fairly high. Before you start tossing your cookies, remember that this juncture is far from clear. We remain dead smack in the middle of the range (S&P, NDX), vols and sentiment are clearly bearish, the insider sell/buy ratio is flashing red and the market is far from cheap. Hindsight is always 20/20 but please don't turn a blind eye towards the risk. Over the long run, a balanced mindset will serve you in good stead.

Have a peaceful night.



position in spx

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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