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Field Day




Far away across the field
The tolling of the iron bell
Calls the faithful to their knees
To hear the softly spoken magic spells.

(Pink Floyd)

Good morning and welcome back to thy bell's toll. Yesterday's pause loosened the gauze that gently surrounded Boo's bloody bear paws. "I've lost all my pride," he said as he cried, "as I've tried and I'm fried by the bovine worldwide." Hoofy, now brazen, replied in a growl, "You're clearly now beaten --why not throw in the towel?" The ursine retreat is in vogue on the street but thus far the war must be ruled incomplete. As the critters prepared for the Hump Day anew, they gathered their metrics for a minxy review. It went a lil' something like this:

Hoofy: (sportin' Prada) Boo, if you were a horse, I'd shoot you and put you out of your misery! Watching this kind of beat down is almost too much to bear.

Snapper: Seriously dude, you're looking at these earnings reports as if there will be some sorta validation for your long standing negativity. Newsflash--this rally is, and always was, about liquidity and the chain reaction set the technical, psychological and fundamental metrics in motion. What makes you think it's gonna abate?

Hoofy: (mocking) Wait, wait, I know. The VIX is low! Insider sales are high! Valuations are lofty! Oh wait, here's my favorite...we're extended! Heck, you've been playing salmon to this market's stream for so long, you're lucky a Japanese restaurant doesn't scoop you up and sell you as sushi!

Boo: (starting to get pissed) Are you done yet? Are all the bulls sufficiently lap dancing with their funny money? Keep in mind, please, that the NDX futures have gone 23 consecutive days without closing below the prior day's low. In the entire history of the Nazz futures, we've only once gone 24 days (Feb. '98). Three times the streak ended at 23 (July '99, Jan '00, Sept. '03). The 24th day closed lower in each occurrence(thanks Jason).

Snapper: Are you listening to yourself? At that rate, you're gonna have a 4% hit ratio. FOUR PERCENT! What's your point?

Sammy: Hey, we all know what the bulls are looking at--we spoke about it all day yesterday. There is virtually nobody left from the dark side. The bulls have more acne than a prom queen, the bears are shadows of their former selves and conventional wisdom is that many of these parabolic charts need to put in that massive spike before they can even think of rolling over. Once upon a time, that would be the very definition of fadable hope. In a momentum driven environment, it feeds on itself.

Hoofy: (examining his fingernails) You've gotta be crazy to fight this and, at this point, crazy is on the bus. Besides, corporate spreads are tightening, not widening, and if you blindly subscribe to that script, you can make the case that another bubble is a brewing.

Boo: I want you to think hard--think real hard--to when the market was an injured beast. There was virtually no reason to be bullish. The fundies were horrid, the geopolitical landscape was scary Mary and the technicals had more breakdowns than a therapist's office. It was at that moment--when Hoofy peered into the abyss--that the world turned upside down (or right side up, depending on your perspective).

Snapper: No offense, but I'd rather pick the Raiders than pick a top. Haven't you ever heard of "long 'till you're wrong?" Besides, the weak dollar is buffering these earnings reports and will soak up any remaining slack.

Hoofy: (fixing his gaze on Boo) What are ya gonna do if we punch through these levels? You've been pointing to S&P 1150-1160 forever and that, coupled with the Dow Jones 2002 top of 10663, is the next floor in the upside elevator. I suppose you'll fixate on the dollar slide...or crude ride....or gold pride...but those are big picture backdrop issues, boss, and not tools for day to day trading.

Boo was about to retort but then decided to bite his tongue. He knew the trend is a friend and, as such, Hoofy's the most popular kid in the class. He sees the parabolas that are many of these charts, he understands how we got here and he's well versed in the many warning signs. He knew one thing, however--the longer you wait for dinner, the better it typically tastes.

Good luck today.

No positions in stocks mentioned.

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

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