Bullets Over Broadway
The market is multi-linear, which is why trading is more of an art than a science.
- Yesterday, when the tape opened sharply higher, Professor Cooper and I vibed that the action was more bearish than bullish.
- This morning, the mirror image is in play with the market indicated to open deep in the hole. The S&P futures are currently trading 15 handles lower.
- I have serious concerns about the macro machination. I think we're near the heights of a debt bubble and, like dot.com and real estate, it'll take a long time to unwind. That's the big picture and it's scary. It's also something we've been talking about for a long time.
- With that said -- and respected -- I may look to fade (read: buy) a sharply lower open for an uber-quick, trailing stop type schnitzel.
- S&P 1505 and 1490 remain levels for Hoofy to lean against, if and when.
- The market is multi-linear, which is why trading is more of an art than a science.
- A month ago, if I told you that lower rates were in the offing, a likely assumption would be that it would be a relief to equities. Instead, as it's a by-product of a flight to quality, it pales in comparison to why rates are lower.
- Is it really a coincidence that societal icons Donald Trump, Paris Hilton, Lindsay Lohan and Britney Spears all fell from grace just as collective perception and market psychology seemingly shifted?
- We spoke about how the effects of "mark-to-market" would take a few weeks to permeate as the second quarter letters were penned. That's starting to manifest precisely at a time when the last thing credit markets need is more supply.
- There are alotta fund managers out there that aren't accustomed to this type of volatility. We waded through apathetic, liquidity-induced, income-fund compressed low levels of volatility for many years. This is the other side of that trade, which is why you'll likely see more casualties of war in the hedge fund arena.
- Define your horizon and respect two-sided risk, Minyans. The goal is to find our way to better days and easier trades.
- Good luck today.
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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