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Randoms: Set-Up for Turnaround Tuesday?

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Where you stand is a function of where you sit.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also What's Shakin' Bacon? and Engine Room, More Scream!


So here we are, deep in the throws of contra-hour as the wheels wobble on the wagon anew. I was just thinking to myself, "Self, doesn't make intuitive sense that the tape tickles fresh upside acne only to get smacked like Charlie Murphy?" And while everyone "expected" a pullback, doesn't it have to feel fugly in order for the market to actually trade lower?

And doesn't the path of maximum frustration dictate that April paper had to come off before the schvitz hit the fan? True and truer all the way around but that was then and this is now and profitability lies in the ride ahead.

My internal dialogue today is centered around the "path" vs. the "destination." As discussed this morning, we sensed two 20% rallies this year nestled around a pretty prickly marketplace. We've gotten the first and now, I suppose, the question is whether we've begun the tricky traverse back towards the lows (in front of the second 20% in the back half on 2009).

In the interest of full disclosure, I'll confidently tell you that I'm not sure. There's a big part of me that believes the bulls need to suck in the last remaining bears by breaking out over S&P 875. The little critter on my right shoulder, however, is reminded me that we eyed a 20-25% lift and that's been fulfilled and then some.

So, how am I trading it? Carefully, with one eye on BKX 30ish and the other on FAS $6.25 (for a potential Turnaround Tuesday Snapper). I'm not betting the farm either way but I am, so you know, open to the idea of adding some overnight exposure if the ducks line up, the gap fills and we see some sloppiness into the close.

That would be a pure trade with trailing stops, if and when, given my broader picture bent that we've got unresolved business to the downside. And yes, I may well be trying to pick up dimes in front of a bull dozer but if there wasn't risk, it would be called winning, not trading.

Where you stand is a function of where you sit. I'll simply share my process, as always, with hopes that it adds to yours.

As always, I hope this finds you well.

R.P.



In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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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