Nuts & Guts
By Todd Harrison Oct 26, 2004 3:09 pm
May peace be with you!
"If Mr. McMurphy doesn't want to take his medication orally, I'm sure we can arrange that he can have it some other way."
--Nurse Ratched, One Flew Over the Cuckoo's Nest
The bipolar Minx is up to her tricks as the bulls try to paint a rally that sticks. The prevalent theme during the last month has been a consistent out-performance of anything four-letter. The cyclicals have been sickly, the financials have had flies and the homies simply haven't played. That dynamic started to shift during yesterday's session and has become pronounced in today's trading. And while the regression has surely left an impression, the wishbone is still in the turkey as we gobble into November.
I'm seeing the same thing you are--a consistent bid has emerged and has stubbornly supported the Matador crowd. The bovine moxie is even more impressive given the backdrop of $55 crude, electoral amnesia and less than thrilling fundamental outlooks. We know that the fate of the tape is as simple as supply vs. demand and we've seen a ton of behind-the-scenes programs today. Whether that's a function of the S&P rebalance or a more (cough) coordinated agenda remains to be seen.
I've maintained the view that the tape is a fade (read: sale) into election rallies but am keenly conscious that perception is reality. That'll either manifest via an end-of-year long squeeze (higher) or trap the hopers in a mad dash to maximum frustration. One thing for certain--the next week and, by extension, the next coupla months--are going to be tense, anxious and hard gripping. Allow for all outcomes in your probability profile and never put yourself in a position where you need a move to survive the ride.
I've been in a personal fast market all day as we tend to critter business. As such--and much to my chagrin--I've gotta keep this last missive light and tight. Keep in mind that there is a ton of futures to buy into the bell (rebalance) but that may be discounted to a degree by those looking to sell into that newfound demand. I'm not playing it, mind you (I hate invisible catalysts), but it seems that lotsa my brethren are. Hedge fund hot potato at its very finest!
Fare ye well into the bell.
No positions in stocks mentioned.
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