I believe in the kingdom come
Then all the colors will bleed into one
Bleed into one
Well yes I'm still running
True story: This morning, when I shluffed out of bed and stepped to the bathroom mirror, I actually jumped back with fright! It's no wonder that Phoebe and Zoë were hiding under the bed--my puffy eye syndrome is full throttle! If earnings season (or the World Series) doesn't end soon, I won't have to dress up for Halloween. Stay-Puff marshmallows anyone?
Back in the rat race, the Minx is doing everything she can to travel the path of maximum frustration. The first rally attempt faded, the second dip got bought and now she's trying to squeeze out yesterday's short interest. In Snapper's corner, the financials are dry as a bone and they're trying to assume the leadership baton. On Boo's side, the semis and Nazz breadth haven't shown the slightest bounce all session. Over here? An empty lunch tray and a missing top button. Oy!
In all seriousness, the action (thus far) is far superior than I would have thought. With the double finski in motion (Nikkei down 500, KLA-Tencor (KLAC:NASD) down $5), today was shaping up as sloppy seconds for Boo. Now, as we cast an eye ahead, we're left to wonder how the Minx will react if/when the Jinx bounces tonight. Further, Mother Microsoft (MSFT:NASD) reports after the close and that'll color the mood huge.
For my part, I nibbled a bit on the first dip, added a few puts on the first blip and will trade further as a function of price. There's a delicate balance between using prices to your advantage and respecting (but not deferring to) the price action. As I just said to Mr. Fokker, the problem with buying 'em because they act well is that you'll lose your catalyst when they get sloppy. At the same time, the ability to brush off negatives is an inherently bullish sign.
As for the end of the day, it'll really come down to the pressers vs. the hopers. The tape is very reactive and, as such, the buyers will come alive higher and the sellers will pull the trigger lower. It's counter-intuitive, I know, but there's relatively low conviction in the marketplace. Add the looming catalysts and sketchy backdrop to the mix and you've got a recipe for whippage.
Think smart--and fare ye well.
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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