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Random Toughts: Winnie the Pooh!

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So you wanted to be a trader, eh?

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Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Was That A Short-Term Low?, The Jedi Mind Trick and Fists and Docs!


How Would Andy Dufresne Trade This Tape? - 12:24 pm



Winnie the Pooh! - 1:34 pm


So you wanted to be a trader, eh? I've been asking myself that question lately as it feels like we've brought a knife to a gun fight.

While I entered my metaphorical bull costume (two legs, or 50% conviction) in and around S&P 1045, it feels as if I'm swimming against the tide. Perhaps that's a good sign (the best fades are the toughest fades) or maybe I'm hoping. It's a thin line, I'll tell ya, but the onus is on us to exercise discipline over conviction.

Some top line vibes:

  • While yesterday was "the diaper effect" for most people, I'm finding today's tape to be entirely more Depend-able.

  • There are two forces in play--structural and psychological. While global governments are trying to stem contagion in the former, the latter matter is amorphous.

  • Oh yeah, it's earnings season. Don't expect anything "good" but keep in mind that news is always best at a top and worst at a bottom.

  • As John Maynard Keynes used to say, markets can stay irrational longer than most people can remain solvent.

  • IF (big if) Hoofy can hold 'em in here, there will be chatter of a (constructive) higher low. That would sync nicely with the VXO "panic" high at 70 yesterday (currently VXO 57, -4%) but this discussion will remain fluid.

  • Absent a crash--which remains plausible given the state of the credit markets--I like what I own (Weatherford (WFT), Transocean (RIG), QLD, OSX) and have the powder to add lower, should I choose to do so.

  • Nobody is smarter than the market. We're simply pawns in the greater game.

  • Away from the obvious fly that is Bank America (BAC) (and Merrill Lynch (MER)), Mother Morgan (MS) (-23%) stands out in the poke of the piggies.

  • As if we need one more thing to look at, notice that the bacon is shakin' at BKX 60 once again.

  • It's "Sell Rosh Hashanah, Buy Yom Kippur" right?

  • If you're diggin' the 'Ville, lock your spot for the holiday trot and belly up with us at the December 4th Festivus. Regardless of how the next 10% plays out, giving back to the kids--and sharing some hugs and handshakes with you community--is a profitable endeavor.

  • Whew, Ben Bernanke is speaking. And I was worried.

  • Cue the REM and take a deep breath. This too, shall pass.

  • As always, I hope this finds you well.


R.P.

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Positions in WFT, RIG, QLD, OSX

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.

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