Random Thoughts: Looking For Bulls to Snap Back
Traders are anxiously awaiting the back half of this Turnaround Tuesday.
Editor's Note: The following content was posted on this morning's Buzz & Banter. It is being reposted in the hope that this real-time look at the trading day will help Minyans everywhere.
Morning Dew! - 9:13 am
- Hey, Ben's scissors are but one gun in a much bigger arsenal. You can bet that Hank is gonna hammer the "Buy it Now!" button for if we fail and flail in the face of the Fed, we're gonna have an outright panic.
- Through the lens of denial, migration and panic, I think that's probably a good thing although PLEASE, Minyans, don't confuse tradable cusps with economic troughs. They are two entirely different conversations. We're in for a long, hard road, albeit one that will feature a fair share of uphill climbs. Keep them in perspective.
- Today? I wanna watch the second dip, with an eye towards S&P 1250 and NDX 1700, and will likely dip my wick (like everyone else). I mean, Jeezums, is anyone out there NOT buying into this? Hmmm....anyway, once that second Snapper arrives, watch the tenor, leadership, levels and volume.
- Hey Greenspan, I'm watching you Fokker! These are, in many ways, you're runners on base.
- Minyanville was purty bearish into the back half of 2007 (the Humpback market) and I would love for us to shift lids and swim against the swirl of negativity. I'm getting there, although it's gonna be selective, disciplined and with a conscious nod that a mighty long road awaits.
- Hey, we'll do it. We're Minyans. That's what we do. It. With verve, dignity and class.
- Good luck Yo. Be the ball.
Six Two Stacked Monster! - 9:23 am
Hey you, getting ready to run the option---be careful out there. And no, I'm not talking about Stefen Djordjevic lurking int he secondary!
Option volatilities are gonna open pumped and pumper so take a deep breath before paying up for fat premium. There are alotta pros licking their chops awaiting panicky purchases and the last thing we wanna see is Minyans getting picked off.
Gate Sniffage! - 9:43 am
- So George Soros thinks this is the worst financial crisis since WW2? I'll see your 63 years and raise you 27 years! 100-year storm, baby, just not in a straight line.
- So what have I done in the face of disgrace? I bought some Baidu (BIDU), Google (GOOG) and Citigroup (C) for starters. Sell hope, buy despair and all that jazz.
- I know, I was gonna wait for the second dip but I dipped a toe with my eyes wide open and powder in my pocket.
- S&P 1240ish is the optimal entry level but it might be too easy. Yeah, right?
- Hey Bear Stearns (BSC), you started this and now, well, you're GREEN. Grrr... that was one I was gonna hop on!
- Crude down 3% and nary a peep from the "that's bullish" crowd. Asset class deflation vs. dollar devaluation. Can we please move on now?
- BING! There goes the VXN (NDX VIX) for 30%. The VXO? They can't get it open...
- And Morgan (MS) and Wells (WFC) and... watch those financials!
Uno Mas Por Favor! - 9:57 am
A'ight, we gots our first Snapper. Fair nuff, and while I toe dipped (Citigroup (C), Google (GOOG), Baidu (BIDU)), I'm looking for some quick flips (discipline) along with other names for the second dip.
Lowe's (LOW) just popped out and bit my ankle, as did Morgan Stanley (MS). Circle those pups and tell 'em they've got an "in touch with" buyer for a trade.
And remember, the last hour (redemptions?) is entirely more important than the first.
Hit me again Ike, and this time put some STANK on it! - 10:36 am
Sooooo... while I respect the potential for a second dip (see NYSE internals 5:1 negative and respect the possibility of redemptions), I nibbled anew on some Morgan Stanley (MS) and Lowe's calls for schnitz and giggles. The one name I missed (forgot, A.D.D.'d) was Under Armour (UA), which I wanted to sport. Coulda, woulda, shoulda...
ANYWAY, while we're far from out of the woods, we seem to be distancing ourselves from the woodshed. I'm not dancing in Fantasy Land and buying into the "worst is behind us" mantra, I'm just trading 'em baby, and trying to make hay while the sun shines. One step at a time, one Minyan at a clip.
It's worth noting that MBIA (MBI) and Ambac (ABK) are both up more than 35%, which was perhaps a tell out of the gate but not one we've shared yet. What was it we said on FOX Business last night? Oh yeah, the sharpest rallies occur in the context of a bear market. True dat.
So you know and so it's said, I'm gonna do some scalpage on my overage and trail stops by and large. I'm purty long, for me, and I'm not smart enough to know if that was the cusp. I'm somewhat confident, however, that by the time this debt unwind is behind us, that most certainly won't be the low.
Time horizon. Risk preferences. Yeah.
As always, I hope this finds you well.
Did you just double dip that chip? - 11:08 am
Relax, George, I'm not talking to you! It's a question I'm posing to Hoofy and Snapper as we anxiously await the back half of this Turnaround Tuesday. Conventional wisdom--or, should I say, my inner voice--sorta vibed a Snapper, followed by another test, followed by a rally that we would need to watch for tenor, tone, volume and vibe.
So what shot did I up and pull? I layered into a round of upside call exposure in Google (GOOG), Baidu (BIDU), Citigroup (C), Morgan Stanley (MS) and Lowe's (LOW), for starters, with every intention of scalping some of those plays and allow for dip part deux (Wait, wasn't there a French actor named that?). Low and behold, my trading systems have frozen up and I can't get executed. Oy vey is meir!
So, I watch... and wait...and scrunch my nose as the tape scrapes better. I am conscious that the S&P is about to fill the opening gap, which is pretty thrilling considering the sixty handle swoon we saw but I would love to feed some ducks as we do so. Man oh man, this day just keeps getting interesting and interestinger!
Lemme hop and chop. I'll be back Minyans--fare ye well!
By Hook or by Crook! - 11:21 am
So you know and so it's said, I sold HALF of every position I bought this morning as the S&P futures filled the opening gap. It wasn't easy (I had to send smoke signals) but I wanted to communicate the process.
Answers I Really Wanna Know - 12:00 pm
- Was gap fillage in the S&P too easy to start the dip part deux?
- Anyone wanna take a guess who orchestrated the Northern Rock bailout plan?
- My Lord, does anyone see what they're doing to big pharma?
- Baby? Bathwater? Baby? Bathwater?
- Perhaps a snivlet of Schering Plough (SGP) with a stop below DRG 320?
- What ails HSBC (HBC) (-3%) in the context of the 2% rally by its peers?
- Wouldn't a sloppy close be more bullish than a jiggy one?
- What, pray tell, will the last hour bring and how many traders are leaning against potential redemptions?
- Are you the Dread Pirate Roberts?
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 email@example.com.
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