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Uncle Boo's Band

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Well, the first days are the hardest days
Don't you worry anymore
When life looks like Easy Street
There is danger at your door

Think this through with me
Let me know your mind
Wo-oah, what I want to know
Is are you kind?

(Grateful Dead)

Monsieur Boo just walked over to the trading desk (bacon, egg and cheese in hand) and, with a full mouth, asked what was going on? I'll tell ya, it's funny...the Boo's of the world, whether they're Minyans or QQQ sellers, seem to always show up when the tape comes for sale. If these last few years have done anything, they've stolen the confidence away from most traders and money managers. As a result, the money flows have become reactive and that, in a nutshell, is why the buyers are higher and the sellers are lower. Counterintuitive to everything we've learned in Finance 101, but something we must assimilate as we navigate this trippy tape.

That being said, we have a long day in front of us and we need to appreciate the potential for, well, anything. As I said yesterday, my honest guess (and it's just that, a guess) was that we'd see a stiff rally at a point before year end...but it would begin from lower levels. Why? Well, the notion of the double bottom holding right where it had to is a bit cute for my taste. Not as cute as Daisy, mind you, but cute none the less. That said, one of the most important rules in trading is that, while we're all going to trip at times, we must not fall. As such, we need to incorporate the potential for all scenarios to unfold as we craft our trading thesis and understand we're all just pawns in the big game.

The zillion dollar question for today's tape is whether those pesky alligators (read: asset allocators) will be back or if yesterday was a "one and done." Hoofy is understandably paranoid (and a little sensitive!), but who can blame him? Every time we've had a spirited sprint, it's proven to be false hope. That doesn't mean the bullish "phase" cant last a bit longer (perception is reality), but understand that there are a lot of balls in the air right now and juggling is best left for clowns (Toddo the clown?). I believe that the S&P allocation pulled up the Nazz yesterday ( the internals in that complex were 2:1 negative for the majority of the day). As such, I'll be on alligator alert early.

In a while, crocodile.

R.P

No positions in stocks mentioned


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