Tape Sees Trap Door Risk
The market was up 260 points. A split second later we were 100 points lower.
Look at me, I'm A.D.D. - 2:41
OK, seriously...have you ever had one of those days? Not in a bad, money losing sorta way (we've all had those days). I'm talking about feeling like you're running to stand still and, when you get to where you thought you should be, you've gotta get going? Hand raised over here!
Some "3/4 to the top-line" vibes:
- I was just musing with Television's Jeff Macke® on the horn about how ridiculous it is that the "easy" trade was buying 'em into the abyss last week and the hard trade is staying long 'em. I told 'em it was even harder when you're right on the side but begrudgingly participating. Bungee of discord vs. wall of worry? Yeah, what he said.
- Oh, I'm sorry, the easy trade was buying Amazon this morning when the schvitz was hitting the fan? Pull this leg and it plays Petty!
- No seriously, and stop calling me Shirley! Hoofy continues to sniff out a rally with immersive breadth. I'm not talking market internals--which are 2:1 positive--I'm referring to industry participation. The homies and financials are good starts. And the trannies help, up 3.5%. Now beta is getting into it, which is nice. One step at a time.
- With all that said and respected, my intention is to lighten up (win lose or draw) as we get closer to S&P 1405. I might even take a schnitzel on the short side of the financials with defined risk (Citigroup (C) $30?), if and when, which is my preferred side despite playing 'em on the long side of late. It's that whole "journey vs. the path that we take to get there" thang.
- Net/net? I view this as a bear market rally with a conscious nod that central banks, Hammering Hank, The PPT, Stimulus packages, rate freezes, social programs and financial re-engineering are ALL trying to jack us higher.
- As I said last night on Fox Business Happy Hour, I'm 75-25 that this is 2001 rather than a 1998 redeux. I've been wrong before, which is why I wanna take it one step at a time.
- Thanks for listening... and thanks for the Minyanship! Fare ye well into the swell.
I'm LOSING it! - 3:53 pm
In more ways than one, Minyans. For starters, I can't get this song out of my head. And that's a problem.
For deux, I'm losing some long side exposure in here as a dual function of discipline and S&P resistance, which we've been eyeing for a while. We've still got some room but I draw levels with a crayon, not a pencil. Are you really that surprised?
I'm keeping some exposure, mind you, but when I don't kill it loaded to the gills (for me) in a +260 tape, it's "know thyself" time to take a step back and a deep breath.
And seriously, I dare you to listen to this all the way through!
Really? - 4:12 pm
Honest Abe here to report that I buzzed this to the 'Ville but, consistent with Mercury Retrograde, it was lost in space. I reprise it with the understanding that the market is already closed. Grr and Grr--rrr!
When I posted my previous Buzz, the market was in fact up 260 points. I glanced lower--a split second--and we were 100 points lower. That's what we call "trap door risk" from back in the day. Trap door indeed.
As soon as I sniffed out the FGIC news, I managed to scoop some puts in the financials--Citigroup (C) and Bear Stearns (BSC), which were the first two I could get my hands on--purely for balance. As discussed, I made sales in my long exposure (better lucky than smart) but wanted to keep some inventory (Schering Plough (SGP), among others).
Instead of hoping, I paired my risk. I've still got sector exposure but hey, that's old hat by now!
Anyway, that's about as much as I can remember at present. And I'll sleep better--one would think--knowing that I'm two-sided and much smaller.
Have a mindful night, Mon Frere, and we'll pick up the scent in the ayem.
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 firstname.lastname@example.org.
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.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter