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The Fuse to the Clues!


Sector rotation possible if financials are suddenly back in vogue.

"Just tell them that their wildest dreams will come true if they vote for you." Napoleon Dynamite

Settle down Napoleon, we're talking tape here. With more swings than a Hedonism vacation, yesterday begged doing a bit less in front of earnings in the midst of a holiday-shortened week.
Old-school Minyans know I'm not shy about putting it out there. We've done so many times over the years, challenging conventional wisdom and taking the other side of the crowd. Alas, as we're apt to say, the ability not to trade is often as valuable as trading ability, particularly when you're not there to monitor risk.
We've spoken about both sides of the coin and while the little bull on my corner has a slight edge (the reverse dandruff), my bigger picture bent dictates that I operate with this chosen stylistic approach. Financial staying power may be "long sleep and short sexy" but opportunity costs, as we know, are the other side of discipline.
Consistent with my current strategy of operating with a scalpel rather than a sword, I nibbled on some Apple (AAPL) puts into yesterday's opening pop and carried the cart overnight with an upside stop on the other side of $117 (it's currently trading above that in the pre-market).

Given I'm heading to Baltimore this morning for family time, I won't hesitate to unwind the bet if I lose my technical context. Good traders know how to make money but great traders know how to take a loss. I want to mitigate blind risk and operate through the lens of discipline over conviction.
Next week will be chock-full of earnings, including the all-important financials, that will shape the tone and tenor in the marketplace. We've recently wondered if the banks took their lumps in the fourth quarter with the express intent of "beating" estimates this quarter and Wells Fargo (WFC), out with earnings this morning, seemingly supports that stance.
Two points of parliamentary procedure on that front. First, we should remember that the sector, as a whole, rallied 60% into these numbers (albeit from an obscenely oversold condition. Second, we need to monitor BKX $32.5, which would "trigger" (bullish) reverse dandruff for the shakin' bacon for as go the piggies, so too will go the poke.
One step at a time, Minyans, as we together find our way.
Answers I Really Wanna Know...
  • Can you imagine how frustrated you would be if you spent eleven centuries building The Great Wall of China and then someone invented the airplane?

  • If you've been bullish, bearish, bullish, bearish, bullish and bearish, why not loosen your grip on the handlebars and take a deep breath and step back in front of the long weekend?

  • University Minyans, have you garnered a gander at UMV lately?

  • Would it be entirely undisciplined to give my small Apple bet (and the market at large) a half hour on the opening before taking action?

  • For isn't sector rotation a possible scenario if the financials are all-of-a-sudden back in vogue?

  • Are you ticking away the moments that make up a dull day?

  • Do you believe your name is your word and honesty, trust and respect are the construct of any successful endeavor?

  • If so, have you climbed on board The Critter Express by joining the Minyanville Underground Railroad, which includes weekly Murmurs from the front?

  • Have we offered our sincere gratitude for all ye faithful who continue to support our effort to affect positive change through financial understanding?
I sincerely hope this finds you well, mindful and operating with balance and perspective. It should never take something bad to make us realize we've got it good. If our biggest loss is one of money, we should consider ourselves fortunate. And yes, this is coming from a card carrying capitalist.

May peace be with you and for those observing, zissen Pesach.

In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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Position in AAPL

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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