To Be or Not to Be
This is our journey, Minyans, and we gotta make it count.
And if I say to you tomorrow.
Take my hand, child, come with me
It's to a castle I will take you
Here what's to be, they say will be
Good morning and welcome back to the flickering pack. There's a lot going on so let's jump right in as we ready anew for a jazzy new spin. With our massive mountain migration seven short days away, we're officially in deep dive mode at MVHQ. To add spice to that mix, we've got two massive back-to-back melds today that'll keep me out of pocket for most of the session. As such, and with hopes that I lend some value before my radio silence, I'm gonna invoke my literary license and chew through the morning dew.
Last night, Pepe, Scotto Reamer, Succo and I gathered for our weekly Succofest as we prepped to head for the hills. After a quick meal (who eats hot pasta in triple digit heat--honestly?!), we found ourselves chilling in the cool confines of Chez Harrison. We powered up our friend Jeff Macke on Fast Money to critique our fellow scribe and launched into deep discussion regarding financial news you need to know before you know you need it. I couldn't help but lean back and smile as I watched the I's and the Q's fly through the air. This is exactly what makes the 'Ville so special, I thought, and we're gonna step to an entirely new level next week.
I thought Jeff looked strong as he offered that the beaten down retailers would get hit on the heels of this morning's same store sales and that he wanted to buy that dip for a trade. While the headlines are coming out fast and furious (stay tuned for his Retail Round-Up), it's an interesting idea. Remember when D.R Horton and Centex messed the homebuilder bed and, as the stocks were off 50%--and equities are a discounting mechanism--they rallied for a trade (please note that HGX 202 is fresh resistance for the group). Retail has been similarly smoked and while I firmly believe that the consumer (70% of the economy) is on the ropes (debt, stagflation, home equity), we could see a similar opportunity for the quick and nimble.
Casting my eyes ahead, I offered a "take it or leave it" thought on yesterday's Buzz as it relates to the FOMC. My sense is that they pause on August 8th (the soft GDP was the swing vote)---a vibe marginally supportive by the Fed Fund Futes---and that we could see a rally into (and potentially through) that "non-event." I wouldn't be surprised, however, if traders sell the "no news" as many will already be positioned for a rally. That, coupled with the fact that a pause and panacea are two distinct discussions, are the noodles currently cooking behind my eyes.
I nibbled on a bit more metal exposure yesterday (and slapped on trailing stops) and, true to the form of maximum frustration, the Bank of England (unexpected) and the European Central Bank (expected) raised rates this morning. That is pressuring (pick an asset class) as whiffs of tighter money blow through the monetary breeze. I wanna watch how we trade come the 10:00 AM hour and monitor our mainstay tells for guidance. I've been light and tight for the most part (save some sizable "situations") and my intention is to remain opportunistic and disciplined in my approach.
Keep an eye on S&P 1280, NDX 1510 and HGX 202 as frameworks (not solutions) and keep your head up, eyes open and thoughts positive. And lest you're feeling overheated or otherwise defeated, take another gander at the mailbag we posted yesterday. This is our journey, Minyans, and we gotta make it count. As our buddy Mohammed Ali once said, "Today I'm 59, tomorrow I'll be 60. Yesterday I was 22. Don't wake up at sixty and wish you had today to live all over again." I concur, Champ, now let's hit 'em hard!
Good luck today.
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 firstname.lastname@example.org.
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