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Blind Man's Bluff

By

May peace be with you!

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Since it costs a lot to win
And even more to lose
You and me bound to spend some time
Wond'rin' what to choose

(Grateful Dead)



The afternoon tape is taking shape as the bulls feed the bears more sour grapes. While there has been noticeable supply select financial issues, there's been a more impressive stand of four-letter demand. eBay (EBAY:NASD) up 10%, Broadcom (BRCM:NASD) up 8%, Altera (ALTR:NASD) up 11%...these names have been under steady accumulation all day as fund managers put their hands over each other's fists. I just used the words "rotational hiding" to describe the action to my buddy and it feels as if folks are trying to make their year in a quarter.

I still feel as if we're caught between a self-fulfilling upside ramp and a downside resolution of the massive compression. The outcomes point in polar opposite directions but the potential exists for both. I often say that a bull market and bear market exist every day and in every way and the tallies in the business section represent the residual fallout of that friction. So while the price action is grindy as a result of these elements, the tape is anything but docile.

I wish I had some salient insights on the near-term direction but I don't have a strong feel and won't fabricate one for the sake of content. I continue to believe that there are potholes in the financial fabric (Fannie (FNM:NYSE)) but don't profess to know when they come to light. Suffice to say that I'm treading carefully in my application of risk and will continue to do so until clarity emerges. That doesn't mean I'm not playing (I am), it just means that I'm staying tight and staying nimble.

It's been a relatively quiet day in macro land although the dollar once again stands out on the downside. The commodities (crude, metals) have taken a much deserved breather after the wild swings of the past few sessions. I mentioned in Randoms that I thought the movement in these groups was drawing in players jonsing for volatility and that adds further risk to an already wild equation. In other words, when traders step out of their core competency, the potential for reactive rationalization increases in kind.

Lots on the radar tonight so please let me hop to sharpen my #2's. I sincerely hope you had a fine day and, if not, that you have the balance and perspective to keep your head on straight. In 25 short hours, we'll flip lids and focus on the important stuff--let's get there with some jingle in our jeans and a smile on our face.

Fare ye well into the bell.

R.P.
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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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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