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Randoms: Of Battles and Wars

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Take care of the minutes and the hours will take care of themselves

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community.


Gate Sniffage! - 9:30 am

Yesterday on the Buzz (and later on News & Views), the markets meandered through a day of nothingness. I offered the following stream of consciousness:

Toss this in the "for what it's worth" category but the scenario that keeps vibing behind my eyes is a false breakout above S&P 950 that ends a few days before the end of the quarter.

With the ten-year tomorrow and 30-year on Thursday, the collective attention will focus on the tone, tenor and source of demand. Layer in our technical bookends-S&P 920 below and S&P 950 above-and sprinkle in some quarter-end performance anxiety for good measure--and you've got a recipe for a meaty move.

Consistent with my modus operandi of late, I didn't push my chips on to the table despite the feel. With mainstay resistance directly ahead, discipline dictated keeping my cards close to the vest and seeing what the dealer delivered overnight. It cost me opportunity but those losses are acceptable as they fade in the rear-view. Profitability, as we know, lies in the ride ahead.

Some early morning top-line vibes:

  • Happy 21st Birthday to Blue Steel Jr, Michael Sedacca!

  • The bull case is predicated on 1) basing above S&P 920, 2) the pennant formation in the financials and 3) performance anxiety into quarter-end (if that plays through, I feel it will end a few days before we actually see the whites of July's eyes).

  • You can learn a lot just by watching and for the second session in a row, Apple (AAPL) isn't participating in the pre-market jig. I A.D.D.'d my put purchase on yesterday's opening (and watched the stock quickly drop $3) but will share those eyes again. It -- along with Amazon (AMZN) and BAIDU (BIDU) -- act heavy to these old eyes. It's early, but please see it.

  • We noted the (potentially negative) dandruff in Wal-Mart (WMT) yesterday and I'll again point to it with Home Depot (HD) raising the top end of their forecast this morning. I'll also remind Minyans that stocks are a leading indicator and Home Depot has rallied 40% from the March lows into this news.

  • Memoirs of a Minyan is officially out of the gate. I'm unsure how this story will be received (particularly outside the 'Ville) but I was once told to "write about what you know and what you love." I share it with all due humility, bare naked truth and a whole lotta trust. I sincerely hope the message shines through.

  • Lemme get this to ye faithful. Have a fantastic session and let's be careful out there!


Heeeeeelllo, Newton! - 10:30 am

  • In addition to taping the Memoirs overview, we took some time to vibe on the markets (imagine that!). This sorta sums up my take.

  • As a follow-up to gate sniffage, Apple (AAPL), Baidu (BIDU), Amazon (AMZN) (and Google (GOOG)) were beaten with Boo's ugly stick out of the gate. In the interest of forthright communication, I shorted some Apple on the opening, covered 50% of the position down three-ish and slapped a tight trailing stop on the leaves. Smallish, but so you know and always honest.

  • The first fade was the easy trade, particularly with the tape opening directly at S&P 950. Now the "fun" starts.

  • Hoofy will offer that a shake-out fake-out was necessary before an assault on meaningful resistance and he would be right. Boo's view is that's just what they want us to think. Moi? I'm keeping a loose grip on the handlebars, reading the tape, defining my risk and trading with a scalpel rather than a sword.

  • Crawlin' on all fours, sniffin' the tea leaves, which finds balanced breadth, a higher dollar (in the face of Russian hawks), tenuous tech (we mentioned big beta, but keep an eye on the SOX, which thus far failed at an important multi-year trendline) and mixed piggies (which remain in a pennant chase).

  • Circling back to Wal-Mart (WMT), Home Depot (HD) and Texas Instruments (TXN) (the latter two released positive news), I will remind Minyans that stocks discount headlines before they hit the tape. That's not to say that can't rally -- and yes, recent news was a constructive first step), it's simply worth noting that equities are a leading indicator.

  • I was vibing hard to Stevie Ray last night and I feel compelled to share. That is, after all, how we roll in the 'Ville.

  • If you wanna customize your Buzz & Banter -- filter professors, change font, cage critters and stuff like that -- we can do that. We can do that. Just click on the button on the bottom left of your Buzz and craft your critter experience!

  • As always, I hope this finds you well.


Narcissist Now! - 11:40 am

Enough about me ... what do you think of my shirt?

Surely I jest, for as Minyans know, our DNA in the 'Ville is laced with humility. With that said, as I've always been a huge believer in the idea that financial education isn't a sound bite or quick hit, I wanted to share this interview that covers a wide range of topics.

While I have you...

  • Trading is more of an art than a science and my intention is to share my fare -- right or wrong, stroke by stroke. You know why I circled Apple (AAPL) as a short, and saw I traded "in-between" and covered half my position (while slapping a trailing stop on the leaves). Please know that while that stop wasn't elected, I chose to cover the rest of the position to flatten out the name.

  • Why, you ask? A few reasons. First, trades are made to be taken. Second, that was the "easy" trade. Third, that's what scalpels do, they carve. Fourth, the "dry" action in Bank America (BAC), Citigroup (C) and JP Morgan (JPM), coupled with the "bend not break breadth" has left the door open for Snapper. And as we know, the buyers are higher (just as the sellers are lower).

  • If you're hanging with Hoofy and looking for Snapper, you might wanna keep an eye on Research in Motion (RIMM), which is up fitty-cents despite both the tape and the flaccid "master betas" (Google (GOOG), Baidu (BIDU), Apple (AAPL)). That, and or the financials (through the lens of risk management over reward chasing), are the most intuitive upside vehicles for those with an optimistic bent.

  • Finally -- last but certainly not least -- Happy Birthday PB!


R.P.

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Position in AAPL, RIMM

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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