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Monday Morning Quarterback: Plights and Passions


One man gathers what another man spills

So you wanted to be a trader, eh?

I'll tell ya, this business has more swings than a Hedonism vacation. One minute you're up half a million in soybeans and the next, boom, your kids don't go to college and they've repossessed your Bentley. It is very much every ounce of a bipolar stroller.

We often say the destination we arrive at pales in comparison to the path we take to get there. I had that thought Friday as I sheepishly peered over my right shoulder at my sixth screen (the one with the NDX 5-day chart) and reminded myself we were trading precisely where we were three days prior. At the risk of mushing myself, I also observed we were still below where I initiated the meat of my short-side risk.

That's not to be confused with my seventh screen, of course, the one with the NASDAQ Comp 5-year chart. According to that bad boy, we're still very much in the danger zone that is a confluence of resistance points coinciding with a precise 50% retracement of the entire technology decline from the 2007 top.

Remember, the three-point plan last week was relatively straightforward. To review anew:

A "perfect world" would include some slippage (to put some distance between Thursday's close and Breakfast with Beeks) and a better-than-expected employment data. Why? Rallies phases typically end on good news, just as nadirs are made in the midst of bad news. A "pop" back into resistance could well lead to a "drop" thereafter.

The better part of Freaky Friday was spent with the tape at the highs and the bulls full of sighs but late day supply arrived into the weekend. And where, you ask, did technology stocks settle when the dust cleared? Like a moth to the flame burned by the fire, NASDAQ 2000.25.

Keep the change, ya filthy animal!

I write this for myself as much as I do for ye faithful. I'm not sure what you're hearing but from my perch, brazen bulls and broken bears abound. That's not to say we can't continue to climb the magic beanstalk from here to eternity-we've seen stranger scenarios in our time together-but a little perspective goes a long way.

I will tell you that being short feels wrong and the best trades are typically the toughest fades. Sometimes right, sometimes wrong, always honest. My stops remain above and my chips are still on the table. Engine room, more steam!

Random Thoughts

  • Societal acrimony? What societal acrimony?

  • Uber-Economist David Rosenberg notes that the majority of the payroll "beat" was a function of the bounce in auto production and a distortion from the federal census workers. I know "it is what it is" but as I have mad respect for David, I wanted to pass along his vibes.

  • You say Goldman (GS), I say "It feels like the insider sales window opened on Friday."

  • That warranted an asterisk as a trading tell (stock specific situation) until Bank America (BAC) flipped the downside switch. That's when things got heavy, man.

  • Some pundits on television are cheering for a higher dollar, to which I would say be careful for what you wish.

  • Sorta like how everyone was conditioned to think falling crude prices would be a positive?

  • Why am I reminded of the Minyan Mailbag on March 6th when, responding to a query asking how we could possibly be so bullish, we ended our reply by stating, "Alas, March ain't over yet, my friend. Stay tuned."

  • Do you wanna spend some QT with Minyan Dougie Kass and I as we "Roar for a Cure" on August 22nd in East Hampton? It's an awesome cause and it'll be a tremendous time. Bring the kids and share some smiles. The important stuff indeed.

  • Planes, Trains & Automobiles, Uncle Buck, The Breakfast Club, Vacation, Ferris Bueller or Sixteen Candles?

  • Zed's dead and ding dong, the witch may be dead too. But you know what's not dead? The recession. It's simply sleeping before the next phase manifests and the point of recognition permeates.

  • Remember that scene in Swingers when Mikey made "the call?" Every time I see that movie, I pray for him to change his behavior. I have that same sense as I watch folks trip over each other to buy stocks. That doesn't make me right, but it certainly makes me honest.

  • I finally saw The Hangover this weekend and, well, you can believe the hype (it's hysterical). I also spent the better part of my Sunday night at a muggy and sticky Yankee Stadium, which was of course worth it as I got back to the city on a broom.

  • Happy 40th Birthday Carter "Go Left, Young Man" Mansbach!

And finally...

The Minyanville community reaches far and wide (122 countries at last count). Through those channels, I continue to pick up anecdotal data points such as this. I believe it speaks volumes through the lens of denial-migration-panic.

"Hi Todd, thanks for your great work and please know the efforts of the Professors are appreciated. I work as a wholesaler for a large mutual fund company (my clients are the largest investment advisers). Over the last three or four days, I've had four bearish advisers throw in the towel and declare a new bull market. They are looking for information regarding our most aggressive equity funds.

Just thought I'd share that with you. I've found these guys to be the last to the punch bowl, so to speak."

Now, can that continue to self-fulfill? You betcha, mister. Is that the type of feedback we typically see near a major cusp? Yes dear, it's reminiscent of the mindset the other way back in March.

I have no agenda other than provoking thought-you know how I'm positioned-so take it all with a grain of salt, a shake of pepper and a dose of perspective. No matter how you're positioned, it should be such that you're able to enjoy the important stuff in life.

Tomorrow is promised to nobody and we should never have regrets.

Best of luck this week


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