Bedtime for Bozo?
By Todd Harrison Jan 27, 2004 2:54 pm
May peace be with you!
After all the jacks are in their boxes
And the clowns have all gone to bed
You can hear happiness staggering on down the street
Footsteps dressed in red
The afternoon drip continues to slip as the traders trade and the flippers flip. As I was jugglin' balls and making calls, there was a knock on my door (from outside the walls). "It's Hoofy the bull and I've come here to chat!", he said in a huff (he's now such a brat), "And I'm looking for Boo, the bear that's been flat, cause something now stinks and it smells like a rat!" As I love all the critters equally (I just don't like some of them at times), I invited him in for a quick bull sit and it went a bit like this:
Toddo: You've gotta be kidding me that you're pissed off. Joe Dimaggio couldn't touch you in his prime!
Hoofy: I'll tell you what's branded me the wrong way, it's those closet bears saying "I told you so" and we're a whisper kiss from multiyear highs. Breadth on the big board ain't (that) bad, the financials could double down and still hold BKX 1000, earnings (with the exception of a few outliers) have been better and we're still holding your levels (S&P 1140/NDX 1115).
Toddo: You're right Hoofs and one day does not a market make. I will say this, though, it's almost universally accepted that we're fine as wine until election time. I've learned first hand the pitfalls of underestimating Elmer's agenda but I also know (second hand) that a full boat is likely to tip when everybody is standing on the same side.
Hoofy: But that's been the case through every level on the way up, no? Read your metric assimilation from yesterday. You yourself walked through the dynamic and noted certain bullish connotations. We're in the sweet spot, baby, and you're not gonna get wood on the ball unless you swing the bat.
Toddo: There's no denying that the action has been snazzy and the time oriented (vs. price oriented) correction is constructive. Just remember that if you're buying just because they act well, you'll have lost your catalyst only after they start to act fugly. That's why the definition of risk is so very important and we must respect the price action rather than defer to it.
Hoofy: Well, tonight's earnings (Amazon (AMZN:NASD), Broadcom (BRCM:NASD), Electronic Arts (ERTS:NASD), Flextronics (FLEX:NASD)) should offer further clues on the fundie front and color their respective industries. On the technical front, nothing in today's action changes much. In fact, my bullish brethren would argue that this is healthy.
Toddo: It ain't healthy if you're luggin' the semis, Dog. In fact, the SOX is a nose hair away from its 50-day moving average again (SOX 515). Yes, there is a continued rotation in play (into energy, airlines and other select issues) but a 4% haircut is a 4% haircut. By the way, do you see the price action in silver today? It's up almost 5%!
Hoofy: Alright Toddo, you're all over the place today--I'm gonna go focus on this minxy beast. Good luck to you--and if you see Boo, tell him I'm lookin' for him. I can't remember the last time that bear got any action and I'm not just talking about the tape. We should all chip in and get him a panda bear...then maybe he wouldn't be such a bitter critter. Love for sale!
The bountiful bovine bolted for the door and, after exchanging glances with Fokker, I turned my attention back to the tape. He made some good points--as did I--and until proven otherwise (read: the second and third dip doesn't hold) there would be no schvitz in Matador City. That's good until it's bad...but with everyone on the same side of the trade, it's something that can turn from bad to worse in a heartbeat
Have a peaceful night
position in qqq
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