Dances With Wolves
Hey Boo...I'm gonna git you sucka!
Put on your red shoes and dance the blues
To the song they're playin' on the radio
The opening pop got smacked faster than Warren Sapp at a weight watchers meeting and the bears are licking their chops. While I see what you're seeing, I want to point out that a morning test was necessary IF the market is to close firm. That, of course, doesn't mean the tape must rally...but in a perverse way, it's more constructive than an up morning.
With that said, there are clear areas for concern. First and foremost, the financials (I watch the BKX and XBD) never found their mojo and have struggled throughout the session. BKX 750 and XBD 395 (brokers) are minor support and they'll likely try to make a stand there. The breadth, meanwhile, has turned negative in the OTC market and is clinging to gains on the NYSE.
Tony Dwyer just pinged me regarding AT&T and pointed out that the weakness in the name (and in the group) is likely being exacerbated by the new slug of longs playing the Dubya dividend gig. THAT, Snoop, is a good thought and likely spot on. When the big guy pushed his stimulus package and every pundit pushed the public to buy dividend plays, the trade got crowded. This, my friend, is what happens when the masses get caught leaning the wrong way.
For my part, I'm sticking with Hoofy as long as the S&P holds 865 and I want to give the frisky fella a chance. The early morning bear press was to be expected and, while the action in the dollar (and gold!) give me pause, my inclination is to exercise a little patience. Obviously, as a big picture bear, I view the upside trade as "dancing between the elephants" but, hey...a bull's gotta eat.
I've got to hop as my trusty ILX just crashed and, for all intensive purposes, I'm flying blind. I have Fokker on the phone and he's talking to Pepe (there's a pair!), so I'm confident that it'll all work out. In any event, I wanted to ping a quick post and communicate my thoughts to my fellow Minyans.
I hope this finds you well.
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 email@example.com.
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