Tomorrow's Price Action Is Promised To No One
A higher close will likely bode well for an "up opening" tomorrow...
Editor's Note: The following content appeared on today's Buzz & Banter and is being republushed for the benefit of the Minyanville community. Also, if you missed Toddo's buzzes from the first half of the trading day, see it here in Random Thoughts: Looking For Bulls to Snap Back.
Things That Make Me Go Hmmm... - 2:08 pm
- The Art Carnage in pharma and consumer non-durables. If this were a "good" rally, I would think that the "slowing economy" stocks would do better than the "pay me now" plays.
- Carnies. Circus folk. Nomads, really. They've got small hands and smell like cabbage.
- That the VXO is only up 12%. The spike was nice (from a 'panic' standpoint) but I don't know if it lasted long enough.
- Redemptions. Forced selling. The kind of general malaise that only the genius possess and insane lament.
- Whatever that was that I ate for lunch. It was Indian and that's about all I know.
- The semis. From Novellus (NVLS) to Applied Materials (AMAT) to KLA-Tencor (KLAC), I would have thought that the beta plays would have more sway (in the context of "PAY ME NOW" plays).
- How many times the media has used the word capitulation. Were they around in 98? Or 2000? Or 1987 for that matter? True capitulation is when there are NO bids and the thought of owning anything makes you feel like you've eaten a bad clam sandwich. Ewwww...
Easy Does It? - 1:43 pm
I was just chewing the dew with Pepe Depew and we were noting some of the flies in today's ointment.
For one, the beaten down sectors are leading the way (homies, financials) and we know that the sharpest rallies occur in the context of a bear market. Ditto the Russell.
For deux, breadth remains 2:1 negative across the board.
For tres, closing our eyes and buying the opening (hand raised) seems a little "pat," for lack of a better word. And no, I have no idea where that saying comes from.
Could we run for the roses into the bell? Sure--the tape is crowded, anxious and all over the place. Am I loaded up with exposure and playing it that way? Well, I sold half my trading longs into the gap fillage (this you know) and have further pared some of the high beta risk, as well as some more Lowe's (LOW).
Just sharing and caring as I step into a midday meld. Seriously---a meeting... now... in the middle of this mess!
I'm a buyer of Calgon in size!!!
One dog's looking this way, the other dog's looking that way. This guy is saying 'whataya want from me?' - 1:16 pm
- Jeezums, is anyone else dizzy?
- Other than the sale on half my opening adds into the S&P gap fillage and some Schering Plough (SGP) calls (above DRG 320), I've been quiet for the last hour. Well, quiet is a relative term--I've been furiously scribing my "five reasons for optimism" that will post tomorrow morning.
- The tape feels like it wants to rally into the close although forced risk is unforeseen. I'm balancing my desire to let my winners run (Morgan Stanley (MS), Lowe's (LOW) +11%) vs. dear prudence and quick hits. What is it we say? When in doubt, sit it out or trade a little in between?
- One of the first to go will be Baidu (BIDU) (with Google (GOOG) closely behind). Both were pure rentals and I don't wanna be anywhere near the former storm when $300 arrives.
- Yeah, that's the ticket--I wanna feed ducks, trail stops and remove emotion. Tomorrow's price action is promised to nobody.
- So, last night, after the weekly Happy Hour vibe on FOX Business, they asked me to shoot by the 7pm show for another hit. When I sat down for make-up, they said "We were watching you on the other show and noticed that the make-up was blotchy." I said, "Actually, I have vitiligo. I don't tan in certain spots and I'm very self-conscious about it but thanks for pointing it out!"
- After allowing a few beats for affect, I smiled and said "Nah, I'm just kidding--it really doesn't bother me that much. I can only hope that this is the worse thing that ever happens to me." That illicited a few nervous laughs, which is good. A little levity goes a long way.
- OK, enough storytelling. Time to furrow my brow and focus on the ticks. Watch the intraday high on the S&P (1321) as a near-term technical toggle.
- As always, I hope this finds you jinglin' baby. Models and bottles. Or bottles and babies. However you roll is fine, as long as you do it with a smile.
Bell Buzz! - 3:23 pm
- Oh yeah, earnings. Happy Happy Joy Joy!
- So, tell me if the dollar is putting in a higher low and I'll tell you where the next meaty leg is for the tape (and commodities).
- While a higher close will likely bode well for an "up opening," I've got no problem with feeding more ducks (win, lose or draw) and tossing the ball back towards the mound. I'm not saying that I'll completely flatten out, I'm just saying that my risk will be significantly less than it was this morning.
- I do believe that part of the "panic" was a run on the Fedibility. If Big Ben woulda just said "Yeah, we're going into a recession but that's entirely alright as it's part of the business cycle," I, for one, would be much more comfortable. it's all about taking our medicine, right?
- SO... yeah, I'm supposed to pull an LL (or Biggie, for those so inclined) and hit the left coast Thursday and Friday for some meaty meetings. I'm playing tetherball inside my keppe about getting on another plane but duty calls, much to my own chagrin.
- Anyway, fare ye well into the bell. I'm off to scribe some vibes on tomorrow's "Five Reasons for Optimism" so lemme put on some rose-colored glasses and get to it. I sincerely hope you hit 'em hard today and, if not, that you've got the perspective to put it in its place.
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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