By Todd Harrison Jan 24, 2005 3:40 pm
Fare ye well!
Well, baby, there you stand
With your little head down in your hand.
Oh my God, you can't believe it's happening again.
Your baby's gone and you're all alone and it looks like the end.
The minxy muse is getting abused as the ursine ignite a familiar fuse. When we powered up today's fray, we noted the importance of BKX 100, DJIA 10,400 and the S&P dandruff as the technical backdrop du jour. While those levels remain a focus, most of the action has been the four-letter variety as the nets fret, the nuts get gutted, biotech gets wrecked and the semis get spanked. Now, with the wishbone stretching and the NDX 200-day looming (1468), the critters must decide if we're finally approaching the tardiest rally in recent memory.
There are a few variables that will dictate whether this is denial, migration or.....well, let's just stick with denial or migration. For one, Elmer seems to have taken his foot off the gas pedal to gauge whether the markets can coast on their own. The answer to that question, as judged by the price action since the FOMC minutes, is a resounding NO. Again, I think he's painted us into a crimson corner--but if the alternative isn't acceptable, he could turn around and pump up (in) the volume. That would bode well for the metals, equities, commodities, schnitzel, Brazil--almost anything that operates as a function of supply vs. demand--but will once again crush the greenback and devalue the basis of our investments.
Leaving that debate alone for the time being, today's action isn't as bad as it could have been. Whenever you see rotation rather than migration, money is simply shifting homes rather than running for the hills. The purists looking for a PANIC! bottom don't wanna see this but I would argue that they're barking up the wrong tree (with the VXO near all-time lows). Shorter-term measures (stochastics included) are constructive and we may see some Snappage tomorrow. I will simply remind you to maintain perspective and assign a time horizon to your risk profile. With the Iraqi elections looming and catalyst calendar full, there will be plenty to chew on in the sessions ahead.
I'm gonna hop so I can post this in a timely fashion. I sincerely hope that you all found your way today and that you have a tremendous night.
May peace be with you.
No positions in stocks mentioned.
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