By Todd Harrison Oct 14, 2003 11:20 am
I don't know, Toddo, I'm thinking that this is the Viagra market!
You say you'll give me
Eyes in a moon of blindness
A river in a time of dryness
A harbor in the tempest
The morning session is gurgling right along as traders shift their focus from the rear-view mirror to the road ahead. The reaction to the first spate of earnings is muted and mixed and the tape is reacting in kind. Now, as we edge towards the afternoon reports, expect posturing to take center stage. Hey Fokker, sit up straight!
The sticky green banks are emboldening Hoofy and I've heard more than one bull opine that the S&P chart will soon look like the BKX. That "could" happen, I suppose, as we know that the financials are the horse that leads the minxy cart. Before you put all your pennies in the piggy bank, however, I will again ask you to "pull back" your charts and take a longer term look. Over the last six years, the BKX has failed repeatedly "around" this zone. They DO act well, mind you, but a perspective directive never hurts.
Away from that fray, the action is fairly nondescript. The internals are flattish and I'm hard pressed to find a sector that's doing much of anything (either way). The dollar has gotten some green back but it's come in (read: for sale) since opening at loftier levels. And over in level land, Snapper successfully defended S&P 1040 and has started to cast an eye towards the big dog (S&P 1050).
While the immediate future is dicier than the Bellagio, I wanted to offer a quick vibe on the Burned Razor thesis. If (big if) this is to play out, it will be predicated, in part, by some panicky action among portfolio managers. A lot of players are now long because the tape acts so darn well and many are sitting on their first pay day in years. If the first, second and third dip doesn't hold and these guys are (potentially) 10% off their best performance (levels of the year), they'll want to lock in what they've got (thus creating a downside bottle neck). That would give sentiment (and the extended tape) some much needed (and long forgotten) fear and set the stage for a nice snapper into baby new year (before a more ominous January drop).
As my good friend Fleck just opined, "BWTFDIK" (don't worry, I didn't understand it either at first). Let's take our journey one step at a time and remain adaptive (and disciplined) in our approach. The tape does have room for a final blow-off (to the upside) and, given the tendencies to date, we must respect (but not defer to) that and factor it into our risk profile. And think positive, cookie, it all begins within.
As always, I hope this finds you with some jingle in your Levi's.
No positions in stocks mentioned.
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