Random Thoughts: The Great Escape!
Musings on stocks, banks, gold, and risk.
I'm in a bit of a ketchup mode this morning as young Ruby made a break for it last night!
The extremely strong-willed 22-month-old scaled her crib only to crash to the floor (she's fine), and when I arrived home from my business dinner, I found her in my bed with an ear-to-ear grin!
I tried to coax her back to her rightful sleeping spot, but sure enough, I caught her in mid-straddle a few minutes later. I won't lie — I secretly enjoyed her sleeping next to me with her hand wrapped tightly around my index finger — but there wasn’t much sleep in the equation. I hope she enjoyed her little adventure as the net goes up tonight!
In market news...
The price action out of today's gate that garnered a nose-scrunch was the financials, which opened pretty in pink.
We flagged Goldman Sachs (NYSE:GS) yesterday as a red bean in an otherwise green banking sea, but the tape shrugged it off (it was, after all, Turnaround Tuesday). Every day is a new day, or that's what I've been told, and as it stands, the BKX (INDEXDJX:BKX) is the worst performing sub-sector today, losing 1.3% on this young session. As go the piggies, so goes the poke...
I am currently sitting with September SPY (INDEXSP:.INX) puts (50% of a full position) and a manicured BlackBerry (NASDAQ:BBRY) upside bet (trading around a long bias above $12; I sold a bit into Monday's ramp higher).
I continue to look for advantageous risk-reward in single stock positions, but (always honest) we moved into new digs on Monday and we’ve been herding moths in a light bulb factory the last few days. That’s pretty much cleaned up, and I look forward to settling back into a rhythm.
Market breadth is currently 3:1 negative, the metals are mixed (after taking a thumping yesterday and yes, that has mattered in the past), the homebuilders are particularly heavy (they've had a nice run), and S&P 1580 is a stone's throw away to the upside (that's the level I'm leaning against, but you know this already).
I'm attempting to keep loose grips on the trading handlebars and the best way to achieve that is to right-size your risk (check), remain patient (check), and have something to look forward to (check—The Final Four in Atlanta this weekend — Go 'Cuse!).
- Yesterday we shared a short-term chart in gold to demonstrate why $1550 matters through a technical lens. This morning, I've pulled back the aperture on the yellow metal, which furthers explains why the (gold) bugs want to avoid that windshield (with a break below). I suppose I should have listened to the email indicator at $1900? No salt here (not our style), but it's uncanny through the lens of social mood, if we can call it that.
Many remember Brian "The Iron Horse" Reynolds from back in the day as he was one of the more prescient professors in MV lore. I pay attention to what he says because he's earned my respect over the last dozen years. He provided a rare interview on CNBC yesterday and you can see that here and here. Enjoy, and remember to see both sides... always see both sides.
Last week, I joined the folks at OTA (Online Trading Academy) for an interview on social mood, hedge funds, and the market. That can be found here. For those further interested in social mood, I’ll be joining Bob Prechter in Atlanta for The Social Mood Conference on Saturday, April 13; and yes, that means two weekends in a row in Atlanta!
Remember, when trading, the mechanics of the swing always trump the results of the at-bat.
- Please note that “50% of a full position” does not mean that 50% of my entire trading pad is exposed; it simply means that I’m halfway to a full position in the risk I'm allotting to this particular bet.
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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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