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Hungry Alligator Seen on the Street


It's been awhile, crocodile.

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO.

I try to remind myself of The 12 Cognitive Bias' that Endanger Investors whenever I survey the landscape. After nearly a quarter-century of trading financial markets, I've learned to take everything with a grain of salt. There have been ups and downs and all arounds but in the end, the very foundation of capitalism is predicated on the business cycle.

We've touched on this before; nothing new there.

There are no crystal balls in this day and age but when something  jumps out or takes shape, I'll share it in kind. Again, this isn't novel thinking; it's been brewing for years. Behaviors are conditioned and price action is taken for granted. Varient views and measured consideration have become a liability. Caution has been thrown to the wind.

Late yesterday, I built the chart below -- the S&P 500 vs. the VIX dating back 20 years -- and almost laughed; the imagery would be funny if it weren't true. The words, "Jaws of Death" came to mind but that sounded grim. 

So I posted it to Twitter and said, "I've been staring at charts too long; this one looks like a hungry alligator." And you know what? It does.

Of course, a chart doesn't suddenly "matter" because you've identified it; it will, however, back-fit the natural sequence as the cycle evolves. I don't know when that happens, I just know that it will.

Winter, spring, summer and fall; days and nights; high tide, low tide;  what comes around, goes around. These precepts have withstood the test of time and they will continue to do so.

Take this in the manner intended, which is thought provocation during the 'Blood Moon' in the midst of Mercury Retrograde. I am not talking my book -- I've got some upside exposure in the drillers (for a trade with a tight stop) and a lot of dry powder -- I'm just sharing the tale.

Somewhere, out there, Bonnie Tyler is plotting her revenge; from here till there, we'll take the journey one step at a time.

Good luck today.


Twitter: @todd_harrison

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Position in OIH, drillers.
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