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Random Thoughts: Traders Heading For Early Exits


Traders scooting early introduces the specter of massive illiquidity (and hence, volatility) into today's close.


Editor's Note: The following vibes were posted throughout the trading day on our Buzz & Banter. They are being reproduced here in the hops Minyans will find the real-time stream of consciousness helpful.

Gate Sniffage - 9:45 am

  • Fire in the hole! The tape opens deep purple as Hoofy hemorrhages the late Tuesday gains.

  • I bought the opening for a fade trade and wanna watch how the first Snapper attempt is digested. Again, not looking to be a hero, just trading 'em baby.

  • We know the importance of DJIA 13K and BKX 91.

  • S&P 1419 and BKX 88 (yesterday's lows) are also levels to keep an eye on, if and when.

  • The best Thanksgiving movie ever? Easy as pecan pie. Planes, Trains and Automobiles.

  • Green seeds in the red bleed? Google (GOOG), Genentech (DNA), United Health (UNH), Hewlett-Packard (HPQ), Qualcomm (QCOM) and... Fannie Mae (FNM)?

  • Hoppin'... I'll be ba-hak.

"Well, I'm still a million bucks shy of bein' a millionaire." Del Griffith - 9:58 am

Some quick observations from the front as Hoofy tries to find his way home for the holidays:

  • It is THIN out there, with large cap stocks gapping a percent at a time. What's that mean to you? Trade smaller and respect the volatility.

  • Note the action in the consumer non-durables and healthcare.

  • Pharma should also out-perform in a slowing economy but I would be conscious of the DRG chart (right here, right now).

  • Will we hold or will we fold? Market breadth (4:1 negative) supports the latter but they tend to lag in a gappy, futures led tape. Not rationalizing my risk, just watching both sides of the trade.

  • As for my adds, I'm using my entry point (in Citigroup (C)) as my stop level on this latest layer of risk. I offer that as it flips the switch to Matador City but know better than to feel "good" about anything in this tape.

  • Indeed, we need to stay humble or the market will do it for us.

Random Musings - 10:24 am

  • Citigroup trades drier than Goldman (GS).

  • Target (TGT) and Beazer (BZH) suddenly found buyers.

  • When I was fading (read: selling) into the relentless rallies, alotta folks thought I was too bearish. Now that I'm fading (read: buying) into the stampede of supply, I'm getting equally perplexed looks.

  • Or maybe it's simply because I hang with metaphorical critters.

  • Again, to be uber-clear, this latest effort is a pure trade in the context of bigger, broader, badder concerns. Dancing between the elephants, tempting fate if you will, for I know one thing. When trading, most of the money is made between the twenties. Catching cusps, or scoring in the red zone, is a tough game to play.

  • IF (monster, huge, capitalized if) Snapper shows, where shall he run to? S&P 1450 is a potential target, as it's the steeper trendline drawn across the lower highs. Until that second lower high is breached, however, Boo won't break a sweat.

  • NYSE internals are only 3:1 negative now.

  • Dark meat trumps white meat.

  • Twenty beats your five, sir.

  • 3M (MMM), Boeing (BA), Dow Chemical (DOW), Deere & Co (DE)... see 'em.

  • "Is this seat hot or what? I feel like a Whopper. Turn me over, I'm done on this side. I'm afraid to look at my arse. There'll be griddle marks!"

  • Hey, a little levity goes a long way. Never lose your sense of humor, Francis.

Man, I feel like we just flipped on the lights during The Crying Game! - 11:43 pm

It's getting hot in here (so hot) as we edge towards the Hump Day Hump. And no, that pun wasn't intended. Crying game? Hump? Never mind. It was funny to me and I'll take my laughs were I can get 'em today!

Some top-line thoughts:

  • I know a ton of traders who are scooting from their turrets at high noon. That introduces the specter of massive illiquidity (and hence, volatility) into today's close.

  • If I were the invisible hand, I would wait until the ranks were as thin as possible before spanking the shorts.

  • With that said, I will offer two thoughts. First, with the tea leaves this crimson, the upside isn't an "educated" bet. Second, I've found that a sharp, into-the-closing bell Snapper the previous day plants seeds of such, thus reducing the odds of a back-to-back upside attack. SO, if the bulls can't find a Cliff Branch soon, they may get carved up.

  • Famous last words! My primary vehicle on my counter-trend bender is Citigroup which, dare I say, continues to trade dry relative to the futures. Of course, the last time I offered that vibe, we saw the intraday high. Either way and anyway, I'm using today's entry point as my stop loss level.

  • Maybe it's the holiday nostalgia but I'm keeping everything in perspective as we truck through the muck. There's much to be thankful for and, not to be trite, I'm just happy to be here. Seriously, we've been through worse and we'll get through this, one step at a time. Think positive, it begins within.

  • May peace be with you.



Holiday Festivus is here! Come join us and support the Ruby Peck Foundation For Children's Education at an old-fashioned Southern-style hoe-down in the heart of New York City on December 7th. Click the image below to learn more!

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