Blondes Have More Fun!
Europe is starting the day firmly in the green!
I come home in the morning light,
My mother says "When you gonna live your life right?"
Oh, mother dear, we're not the fortunate ones,
And girls, they wanna have fu-un.
Good morning and welcome back to the sunshine fun. Goldilocks has hit Ft. Knox and filled her basket full of stocks. The shock of shocks is that this fox has opened up Pandora's box. "I used to play with three young bears," the vixen said without a care, "but they all left (they're running scared) and left me to my market prayers." Will chickie's never ending spending keep this minxy beast ascending? Or is this blonde simply pretending that we'll have a happy ending? It's hot, it's cold, it's just now right so come join the peroxide fight!
If action speaks louder than words, Boo's incessant rambling is being droned out by the noisy joys of bovine poise. While past performance is certainly no guarantee of future pain, the backdrop is eerily familiar (yet easily forgotten). Yes, there is something to be said for the impressive action. Sure, Elmer has been quite wily in his whippet snippets. Yup, many charts offer textbook examples of basing and breakouts. The question now becomes one of sustainability vs. vulnerability and the path that we take to get there.
Once upon a time, outsized moves in speculative issues was a precursor to prolonged pain. If memory serves, Hoofy could do no wrong (as he sang his giddy song) and if you were on the outside looking in, you felt like a shmuck times two. Obviously, that FED on itself (pun intended) until the non-believers either capitulated or were carried out sword in hand. I don't know where we are on that field but the battle lines are being drawn (and nobody's right if everybody's wrong).
The spur in Boo's fur continues to be Brian's spot on analysis of the corporate bond market. As long as spreads tighten and supply is absorbed, there is a case to be made for a snooze in the shade. That is clearly a broader analysis--and doesn't change the extended condition and near-term vulnerability--but it warrants respect for those keeping score at home. It's a function of Elmer's reckless agenda and his willingness to mortgage our future for the thrill of immediate gratification. It'll likely go down in history as one of the historic financial faux pas but, as we learned during the last few years, nobody asks questions as long as the screens are green.
The schvitz will hit the proverbial fan in the next few days starting with tomorrow's employment data. It'll pick up in pace with next week's earnings avalanche and you better bring your goggles. I've been too cautious but with that said, I think we're closer than people think to serious gut check. With everyone--cabbies, garage attendants, civil servants and fund managers--shvitzing for missin', we're uber-ripe for a legitimate gripe. This isn't an advice site--it's meant to add food for thought--but the chasers will likely be choking by this time next week.
It's been...how long?...since a "healthy" pullback that when it comes, it may be anything but. The longer you wait for dinner, the better it tastes and Boo's so thin (how thin is he?), he looks pregnant after eating a pea. Ready the stir-ups, baby, 'cause the stork is at the door. Ding dong--the witch may not be dead, but the temperature is rising and the Doc is on the links. This isn't a death knell for the whole spell--and it doesn't mean we can't see higher prices first--but abracadabra, let there be fright.
Alcoa (AA:NYSE) will kick things off and that should set the forward tone. The cyclicals have been en fuego (on the heels of increased commodity demand) and current levels reflect optimism of continued acceleration. Get read to march, Minyans, as the earnings parade is about to start and the baton is a twirlin'. Goldilocks is a talented babe but we're about to see how well she can juggle.
Good luck today.
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 firstname.lastname@example.org.
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