"Did you ever see that "Twilight Zone" where the guy signed a contract and they cut out his tongue and put it in a jar and it wouldn't die, it just grew and pulsated and gave birth to baby tongues? Pretty cool, huh?"
--Garth Algar, Wayne's World
The Hump Day jump continues to pump as bulls sit back (they're pleasantly plump). The tone, thus far, is firmer than a college cheerleader with the notable exception of the saucy semis. Remember, SOX 535 is where the group sprouted acne and it "should" act as support (not only for a chip dip but also for the overall tape). I continue to pick up cautious chatter (in front of tonight's reports) but in this fakakta market, that could very well be bullish.
My dilemma--ok, one of my dilemmas--is elasticity of the current mindset. We touched on the vuja de this morning and the eerie similarities that have emerged. Add to that list the pick-up in rumortrage and the buy first, ask questions later shots in the dark. Again, these are signs and signals but the strange can get stranger (even in the face of danger).
In level land, S&P 1130ish and NDX 1540ish represent the recent highs (and first resistance) and traders have surely set stops above. Sector wise, the firm financials are leading to an "S's over N's" type of tape and emboldening Hoofy's old school heroes. The breadth is also lending to this dynamic as the internals are noticeably better on the big board (2:1) vs. the four-letter freaks (4:3).
On the macro front, gold has finally exhaled a bit (down a finski) and the dollar index is dead-catting (+50 bips). Crude continues to hold its bid and that should be on all of our trading radars. I'm not sure many analysts have priced $35 barrels into their monkeys and if it continues--to, say $40--it could offer cause for paws. Certainly not today's business but something to monitor.
The critters and I are jamming as we ready for tonight's parade. Fokker, for his part, is anxiously awaiting the results of Latin star search as his rendition of La Isla Bonita was stunning. I don't mind the choice in music, Greg, but the banana headdress was a little much. At least, that's the word coming up from the Birdcage.
As always, I hope this finds you with some jingle in your jeans.
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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