Editor's Note: Todd posts his vibes in real time each day on
Buzz & Banter
It's Groundhog Day in the financial markets as we walk into green
arrows throughout Europe (sans Spain) and Asia. Closer to home,
with earnings painting the tape (
United Parcel Service
) were decent,
) missed) and
(which came in slightly better than expected), stateside futures
are indicated higher as I scribe this pre-market vibe.
(INDEXSP:.INX) having edged through three different technical
resistance levels-the back-test of the uptrend since November, the
downtrend since April 11 interim top, and the right shoulder of a
pattern that (would have) worked to
was breached)-the bears are clinging to the notion of a potential
double top (should
contain the euphoria).
Perhaps they should
chew through their cognitive biases
as a cautionary tale; the price action since April 18, when the
tape briefly breached
was that really only a week ago?-
has been nothing short of impressive. My trading performance has
paradoxically mirrored that move,
as discussed yesterday
After covering up meaty gains and flattening my pad on that first
test of S&P 1540, I opted to layer into additional short
exposure and adjust my stops higher.
In hindsight, I can add one more misstep to the discussion started
yesterday. I jumped the gun on re-initiating my risk after a
stellar streak and a smart cover; as old school folks will attest,
I have a habit of being early on my entry and premature in my
evacuation. After catching a sharp 3.5% move, I didn't want to miss
the bigger bust, and that's a cardinal sin.
The "fear of missing" is one of the most destructive emotions in
the marketplace, and we know that
emotion is the enemy when trading
There is no putting lipstick on this pig; regardless of where we go
from here, the mechanics of my swing were rusty at best. I got too
big, too early, whereas
I demonstrated proactive patience and initiated risk in and around
S&P 1580 has been circled for many moons
-I could have traded around my exposure with a clearer head while
playing offense, rather than defense.
There is tiered resistance up to
but I will cover up some of my short exposure with a measured move
, if and when, as a function of
my long lost friend, discipline.
There's no hiding in the 'Ville-we don't brush our mistakes under
the rug, we attempt to learn from them, however painful they may be
at times. As always, I plan to wait for the first half hour of
noise to pass before making any directional decisions.
The Learning Curve
Each year, I like to share an article,
Things I've Learned
, which helps me keep things in perspective.
As I settled into my turret yesterday following a full day of
pre-op prep, I borrowed that format in real-time on the Buzz &
click here for a free trial
!). The following observations were offered in no particular order:
- I beat myself up pretty bad for
giving back a fair chunk of my year
; today (read: yesterday) while waiting for one of my docs, I
flipped that switch. Instead of thinking about what I've lost, I
thought about my YTD gains, as well as my current positioning as
we toggle near
- Again, if I entered the session flat, I would be fading
(read: shorting) this tape with a stop above. Then again, if
wishes were knishes, I would weight 300 pounds.
- Through objective eyes, they've thrown a LOT at this tape
(including weak durable goods orders) and it didn't get hit. As a
wise man once said,
the reaction to news is always more important than the news
- Earnings (on the aggregate) have been fine on the top line,
but they've left much to be desired from a revenue standpoint
(read: cost-cutting measures helped corporate America).
like the bulls have some pep in their step right before the "Sell
in May and Go Away" time horizon arrives.
We posited that in 2011
and it paid off in spades.
- If you had the Mott's to sell
) strangle or straddles into earnings, you were the real winner;
premiums got crushed like school-girl affections.
- In terms of my forward schedule, I'll be locked to my turret
today, tomorrow, and Monday before finally getting my hip flipped
on Tuesday. I'm told that I should expect to be in the hospital
the rest of next week but
that didn't stop me from trading (and writing) last
and I'm approaching this milestone with the same mindset. Quite
hopefully, we'll have the same results.
- Many thanks, and have a GREAT day!