A Shot in the Bark
By Todd Harrison Jan 07, 2004 3:07 pm
May peace be with you!
"I wasn't like every other kid, you know, who dreams about being an astronaut, I was always more interested in what bark was made out of on a tree. Richard Gere's a real hero of mine. Sting. Sting would be another person who's a hero. The music he's created over the years, I don't really listen to it, but the fact that he's making it, I respect that. I care desperately about what I do. Do I know what product I'm selling? No. Do I know what I'm doing today? No. But I'm here, and I'm gonna give it my best shot."
The afternoon sizzle has started to fizzle as Boo digs deep for some sell-side shnizzle. While the averages are decidedly mixed (how can something be decidedly mixed?), there's plenty of action if you scratch the surface. If you're (over)trading the market instruments, however, today's trading is a recipe for whips and change.
First of all, let's talk telecom. Nortel (NT:NYSE) has tacked on 20% today on the heels of the technical breakout, a Verizon (VZ:NYSE) contract and multiple midday analyst upgrades. That (and some low level chatter) has sparked the group and spurred the speculative excesses. Granted, the stock tickled $90 in 2000 (and has been left for dead since) but the action is notable nonetheless.
Another sector that's started to spark is the brokers. I haven't heard anything new, per se, but I can see what the bulls are staring at. The XBD (brokerage index) chart is peeking out above recent highs and squeezing the bejezus out of the bears. XBD 700 (bubble top) is within spitting distance and I suppose this is what they mean when they say we're in a period of "easy money." If Elmer's intent is to reflate the bubble gum fun, he's well on his way to accomplishing his goal. It's just a crying shame that our children (and their kids) will be left with the bar tab.
There's no question that the tape is stretched by almost every measure known to man. An intramarket rotation would be the most constructive path and identifying sector rotations will serve us in good stead. I'd rather pick my nose than a top right now (eww!) but I've got my levels and I'm watching 'em closely. Again, how we get there (if and when) will be as important as when we get there.
Beeks will drop off some jobless claims tomorrow (exp. 345k) before his moment in the sun on Friday (payrolls). That'll set the stage for next week's earnings avalanche and usher in the "put up or shut up" period. It promises to be nuttier than Austin Power's coffee so get your rest this weekend--and find your game face.
That's about it from the Minyan skip as the bears and my stomach grumble and stumble. The battle into the bell will likely swell and while the breadth doesn't confirm it, the bulls will do all they can to press their bets. Their efforts will be focused in the areas where they've spent most of their ammo so remember, Minyans, it's a market of stocks and not a stock market.
Good luck into the close and fare ye well.
No positions in stocks mentioned.
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