Randoms: Walking the Tightrope
Traders traverse a wire into the weekend
"Lookin' back in front of me in the mirror's a grin
through eyes of love I see I'm really lookin' at a friend"
- Stevie Ray Vaughan, 10/3/54-8/27/90
Where were you nineteen years ago today? I was interning at Morgan Stanley in London between my junior and senior year of college, oblivious to the fact that one of the greatest guitarists in rock & roll history died in a tragic helicopter accident. While Rolling Stone ranked SRV #7, I've got the big dog second only to the masterful Jimi Hendrix. To say he was special would be the understatement of the day.
What would some other statements include? They might touch on the fact that for the second day in a row, economic numbers came in better than expected and the market put some stank on it. The reaction to news is always more important than the news itself and while there's a long time left in the session, the shift in tenor is noteworthy.
Given we're deep in the throws of the dog days of summer, I'm gonna invoke my literary license and chew through a slew of random thoughts. In no particular order:
- Always early what? If I was very bullish in February, does that mean the meaty decline I'm positioning for will arrive in September? These are the types of things that keep me up at night; a little foresight is sometimes a dangerous thing!
- Someone once said you can pick the direction or the timing but you'll rarely nail both. The bridge to that gap is discipline and the other side of that is opportunity cost. At least that's how it's drawn up on the chalkboard before we hit the field.
- If Papas' got a brand new bag, what the heck did Mama get?
- Remember yesterday when we wrote 1010 Wins and opined that if the S&P slipped through 1022, it would "work" to 1010ish? Keep that in mind as we edge through the grind.
- I still sense an intuitive pullback could work to S&P 950 (from where we broke out) but we'll take that shake one step at a time.
- I got a slew of emails from folks following yesterday's Yahoo TechTicker tri-fecta asking for individual advice. As many weren't Minyans (yet), I told them that I don't color by numbers; I simply try to paint the landscape.
- I entered today with a healthy mix of October and November Powershares (QQQQ) puts, which were added at various junctures, including a slew into Tuesday's opening spike higher.
- That exposure is different from when I slapped on the full bear costume for a trade (the first probe of NASDAQ 2000), which was fully covered into last Monday's brief malaise.
- Consistent with my stated game plan, I'm reducing risk into the weekend, where I hope to take my vacation with one thing on my mind. I won't say what precisely that thing is but it's safe to assume it won't flicker.
- Size wise? Into this morning's 30- handle NASDAQ slippage, I shaved 50% of my risk and slapped trailing stops on my leaves.
- I'm wrestling with whether I should leave some November puts on my sheets (with the stop loss, of course). That would require a Blackberry and the assumption I can navigate a mountain bike while trading.
- One thing I can tell you with certainty is that you're at a dangerous disadvantage if you're not 100% focused on the path directly in front of you. That goes for mountain biking too.
- For those who wont have blind risk on-not to be confused with Blind Faith-I would note that our "best set-up of the year" is back below the all important NASDAQ 2000 level again.
- RIP Stevie Ray.
- To put the rumors to rest, I am not going to CNBC.
- Green seeds in the red beans? Citigroup (C), American International Group (AIG), Morgan Stanley (MS), American Express (AXP), Honeywell International (HON), Boeing (BA) and Nokia (NOK).
- Crude (OIL) is down another deuce, which was one of our nose scrunchers a few days ago. Remember when we caught Roberta Flack for offering that lower crude would be equity negative?
- I'm officially hooked on True Blood. Think of Elisha Cuthbert hanging with a slew of vampires and you'll get a feel for Anna Paquin (although, to be fair, Elisha doesn't have an Oscar).
- Speaking of statues, if you want to see a grown man (almost cry), check out the 46th minute. That whole thing still feels somewhat surreal.
- Good traders know how to make money, great traders know how to take a loss.
- If I had to pick two words to describe yesterday, they would be "biding time."
- If I had to pick a song, it would be this.
- An image? This
- An observation? We noted late in the day on yesterday's Buzz that the master beta complex (Baidu (BIDU) to Apple (AAPL) to Research in Motion (RIMM) to Google (GOOG)) didn't lift when Snapper sniffed. With that complex under pressure today, I'll again share that you can learn a lot just by watching.
- Congrats to my dear friend MJ on the birth of her baby boy!
Answers I Really Wanna Know…
Does anyone else think it's curious that they pulled the plug on high frequency trading after a massive equity spike higher?
Did you catch my Yahoo segment when I offered, "The crisis is over" are the most dangerous words on Wall Street?
How bout the one that weighed the fate of the U.S dollar?
And the one about the Splenda Market full of artificial sweetener?
Can I thank our family at Atlantic Advisors for being the first official sponsor of the 2009 Festivus--circle the date, Friday, December 4th--while extending a similar invitation to those who would like to support an awesome cause and be a reflection of the community we keep at our annual holiday soiree?
As always, I hope this finds you well, Minyans. Enjoy these last few weeks of the summer as September promises to be a month to remember.
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.
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