Random Thoughts: Should I Stay or Should I Go Now?
Will bulls keep pushing, or duck out early?
Editor's Note: The following content was posted in real-time on the Buzz & Banter and is being shared here for the benefit of the Minyanville community.
Gate Sniffage! - 9:53 am
- Fists and Docs! After yesterday's fugly fray, you can expect a probe lower this morning.
- From there, President Tyler will have an opportunity to stake her claim to turnaround fame. If she can pull off a special holiday edition counter-trend rally, she'll earn herself a place in the Minyanville Hall of Fame.
- As Baidu (BIDU) pulls back to double secret (50- and 200-day) support, I've nibbled on some upsides with a tight stop directly below ($315). Win, lose or draw---and please don't blink--it's a worthy try from a risk-reward standpoint.
- Oy! Bloomberg is reporting that banks, security firms and lenders have $871 billion of bonds maturing through 2009. That, in a nutshell, is the corporate credit overhang we've been incessantly harping on.
- Of course, with that in mind, the greenest beans on my screens today is the upper left quadrant of my third (of eight) monitors devoted to the financials. As go the piggies, so goes the poke.
- Breath? Sorta like hazelnut coffee. Oh, breadth! Flat and flatter as we eye the 10:00 hour (when we "officially" start looking at market internals as a trading tell).
- Please circle Thursday, December 4th for the Annual Minyanville Festivus to Benefit The Ruby Peck Foundation for Children's Education. We'll begin registration next week and, as last year's fete was sold out, we encourage Minyans to lock their spot!
- Hey, at the end of the day, we're all about giving back and for me, there isn't anything better than helping kids in my grandfather's good name.
- Good luck Minyans and remember, discipline over conviction.
And We'll Have Fun, Fun, Fun Till Daddy Takes the Trading Away... - 10:30 am
- Hmm, let's see--I entered today's fray relatively constructive (sold my S&P puts into yesterday's close) for a Turnaround Tuesday dance between the elephants (with a respectful nod to the corporate credit overhang).
- What vehicle do I up and sniff out of the gate? Baidu (BIDU), given it's master beta status (it's a mover) and the dual support levels directly below. Sure nuff, it's the worst acting stock on my board as it eyes last Wednesday's opening gap (to $310). Do I know how to pick 'em or what?
- Hey--anyone who tells you they're always right is not someone to be trusted. Truth is, war wounds are the cost of doing business. And yes, some are certainly worse than others. The only difference between a mistake and a lesson is the ability to learn from it.
- So--what to do? Part of me wants to give the trade a bit of room (and see how it acts once that gap is filled. The other part of me is screaming "reactive rationalization never works out well." Still another part of me is saying "See, aren't you glad you're trading smaller given the thin holiday week?"
- The sum of the parts is that I'll trade this puppy "in between" and make some sales and slap a stop below that gap on the leaves. The point is--there's no hiding in the 'Ville and my hope is that sharing my missteps will allow Minyans to avoid similar snafus altogether.
Other than that Mrs. Lincoln, how did you like the play? - 11:04 am
- The sticky green financials continue to improve, led by Freddie Mac's (FRE) 25% gain. Granted, we're talking 80 cents but each day is a snapshot unto itself.
- Remember that S&P pennant formation we flagged yesterday? We offered that if 1268 held, Bonnie would have a window of hope. It pegged that level on yesterday's close and while these formations typically resolve in the direction of the overall trend, "seeing both sides" dictates noting that S&P 1287 is other band tag in play.
- What the heck is a rose with a fisted glove?
- Note NYSE internals adopted a 2:1 posture. Surprisingly, Madonna and Angelina Jolie had nothing to do with it.
- I learned a long time ago that win or lose, you should toss the ball on the mound and jog to the dugout the same way. The goal, as always, is to stay in the game.
- Remember we noted the homies yesterday? They're rolling up the Street smoking ursine, sippin' on gin and Boo today. Maybe something, maybe nothing, maybe a pterodactyl but given they're up 30% off the low--and as they were the first sector to fail in the credit crisis cycle--it's worthy of a mention.
- As always, I hope this finds you well, warm and weathering the storm.
Clash of the Titans! - 11:41 am
In that vein, note that Mother Merrill (MER) is the first financial to flip the downside switch.
OK, OK, I'll fall on my sword and go see The Dutchess.
Stocks that are heavy in an up tape (red beans in the green sea) invariably act worse if the tape turns. That's true regardless of positioning so remember, Minyans, hope is never a viable investment strategy.
"I don't trust one side and don't respect the other" continues to resonate in my crowded keppe and it has nothing to do with the stock market.
Gotta hop to jump on The Truman Show--I'll be back Minyans.
As always, I hope this finds you well.
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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