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Box Trot

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We'll see how strong Hoofy is with class back in session!

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But it's just a box of rain
or a ribbon for your hair
Such a long long time to be gone
and a short time to be there


(Grateful Dead)


Here we are. September. Football season. New beginnings. I've gotta admit that it feels good to be back in the saddle. I spent the beginning of last week auditioning for the Planes, Trains & Automobiles sequel and the last half in bed with a nasty head cold. It wasn't the grooviest week off but it's time to shake it off and suck it up. Something tells me this summer will serve as the calm before the storm and we're gonna need to bring our A-game.

The early morning analyst train is chuggin' right along and most of the news is equity friendly. This, of course, comes as the S&P tickles the all-important 1015 level and attempts to share the acne of her sister indices. If we point and figure, S&P 1020 will serve as the "official" breakout but keep in mind, please, that the same "confirmation" in the Dow was met with an initial 200 point flush. In other words, respect (but don't defer to) the technical metric as we edge our way through the muck.

The financials should tell the tale and they'll be helped early by Merrill's upgrade of the F-troop. We spoke of the crowded conditions in Fannie Mae (FNM:NYSE) a week ago and the potential for Snapper to emerge (and spank the cult). Sure enough, the critical 60 level held (triple bottom) and the chase began. I've been trading around the short side (as you know) and will use today's liftage to roll my puts "up and out." I'm not goin' nuts, mind you, but I will surely attempt to use higher prices as an opportunity.

The risk to that posture--and the short side in general--is the timing aspect (of a trading thesis). As we've learned through the years, price action can be exacerbated by structural and psychological metrics. With Elmer and Dubya cheering the tape (and performance anxiety kicking in), it's difficult (and dangerous) to make a stand. The best we can do is adopt a risk profile that's adaptive, a mentality that's flexible and humility that's consistent.

I would like to take a moment and welcome the college Minyans back to school. When I was rompin' around the 'Cuse and wanted to learn about the market, they smiled and tossed me a Wall Street Journal. We're proud to offer the first dynamic learning tool and hope you find Minyanville a valuable educational experience. And yes...Syracuse football has some issues this year. It's a good thing we've got that hoops trophy to keep us company!

Knock 'em silly today.
position in spx, fnm

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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