Freaky Friday Potpourri: The Euronary Tract Infection
Where's there's smoke, there's Souvlaki.
There are no such things as accidents.
Princess Di's sad situation in the tunnel? Not an accident.
Drew Brees landing in N'Awlins? Not an accident.
The S&P stopping in it's tracks yesterday at 1079.99? Clearly not an accident.
I don't know if folks follow technical analysis because it works or if technical analysis works because people follow it, but for purposes of this discussion, it's a moot point. As Minyans know, I set my stop on this latest iteration of my short side stab on the other side of S&P 1080 (1085, to be exact, drawn with a crayon rather than a pencil).
The tape kissed double secret resistance during Thursday's run and retreated like a French sentry in the face of danger. News doesn't make markets; markets make news, and that's again playing out as we ready ourselves for well-deserved three-day respite.
China raised reserve requirements for the second time in a month, heeling the dog that wags our stateside tail. The mere fact that our economic fate is inextricably linked to a communist country is a story unto itself but for purposes of today's column, suffice to say that cold water poured on their hot growth sends chills down the spine of our fragile stateside economy.
The dollar is surging (as per our eyes yesterday) on fears that EU efforts of Greek aid will undermine the region. German Chancellor Angela Merkel hasn't been able to morph moral support into financial aid and the specter of political deadlock in the face of a dynamic crisis creates a chasm of risk, much like we discussed on Wednesday.
I filmed two short segments yesterday touching on these topics. The first was on The Unintended Consequences of Gifts for Greece and the other spoke to the potential for volatility to arrive in waves as global reality checks hit home. I could summarize what was said but your time (and my fingers) would be better served simply by watching the clips.
Some Random Thoughts? Sure, it's Friday; let's do this.
- Holiday weekend? Pishaw! I have a business dinner tonight and another Monday night. It's a good thing I love what I do or my "work to live, don't live to work" ethos would be the definition of hypocrisy.
- I was asked last week why I rolled my S&P puts from March to September. The answer becomes more obvious with each passing day and every single weekend, as theta never sleeps.
- Remember the VXO at 23 yesterday? NOT! It's at 25 now, and it has a ways to run before the word "panic" can be used in the proper context. Remember also, Minyans, that volatility is the opposite of liquidity (think about that).
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- Trading wise? I faded (read: sold) strength and I'm picking into weakness as I "trade around" a short-side bias. The mechanics, while subtle, are important. I'm selling blips to buy dips, rather than buying dips to sell blips. Until such time that the pattern of lower highs is broken, that's the methodology I plan to employ.
- And finally, seeing both sides, I'll again draw your eyes to this patten that was passed along by Minyan Ten Dan. SEE IT, even if you choose not to believe it. This, as much as anything else, is why I'm tethering such a tight risk leash.
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- This is a great "lens", courtesy of Minyan Barry Ritholtz at The Big Picture.
- The Jeff Goldblum in yesterday's action? The pink piggies acted Punky Brewster.
- In English Speak Please? The fly in yesterday's upside try was the steady stream of supply in the financial stocks. You can learn a lot just by watching and true to form, that complex is weighing on today's fray.
- Wells Fargo (WFC), Deutsche Bank (DB), HSBC (HBC), Bank America (BAC) and Goldman Sachs (GS)-particularly in and around the all-important $150 level-are stocks to watch in that regard.
- Why does MV Editor Matt Theal have a poster of Mario Lopez on his desk? I'm not saying there's anything wrong with that, I just don't understand why it has to be a life size cardboard cut-out.
- While I believe there is real risk of grave downside danger (is there any other kind?), "discipline over conviction," emotion is the enemy when trading and opportunities are easier made up than loses continue to resonate in my crowded keppe.
- Are you an analyst with a specialty in the energy, healthcare or financial vertical? Are you good at what you do and better at who you are? Are you looking for an opportunity at an up-and-coming boutique laced with strong human capital? (if so, please let me know!)
- How will YOU choose to respond to the challenge before you? (this is awesome)
While Washington isn't impressed with Iran's claim of nuclear fame, how long will Israel wait?
Good luck Minyans, and look on the Brightside!
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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