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Positioning for Turnaround Tuesday

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The tape tends to come back after manic Mondays.

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You don't have to twist my arm to be bearish.

Remember 2005? I painted a scary picture regarding "overcapacity on the sell-side," the dangers of debt, the risk to real estate and multiple compression concerns (among other things, such as the likelihood that energy would overtake the financials as top-weighting in the S&P).

2006? I humbly offered that "the probabilities of a prolonged socioeconomic malaise are higher than most folks have factored into their risk assumptions."

Two weeks and 1000 points ago? I scribed the recipe for a market melt, noting five things that would pave the way for a downside disconnect.

Suffice to say that I completely respect the potential for further slippage. I have a high degree of confidence that we're looking at a multi-year deleveraging process that will shake the foundations of Wall Street and Main Street.

With that said, there are two reasons I'm holding my (relatively outsized) Wachovia (WB) call position overnight.

The first is that the potential for a bounce in the banks once the new quarter arrives and funds no longer worry about showing them on its sheets.

The other? It's Turnaround Tuesday and as nonsensical as it seems, it has a tendency to stand tall.

I've gotta hop and turn over the hot seat to Pep but I wanted to offer my honest assessment before thy final bell tolls. My compass could be askew but as we're apt to say in the 'Ville, sometimes right, sometimes wrong, always honest.

Fare ye well into the bell my friends and remember, the definition of an investment should never be a trade gone awry.

R.P.

Position in WB

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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