By Todd Harrison Oct 27, 2004 12:30 pm
Right on your kisser!
A love struck Romeo sings the streets a serenade
Laying everybody low with a love song that he made
Finds a streetlight steps out of the shade
Says something like you and me babe how about it?
The Hump Day run is under the gun as the bovine dance beneath the sun. What started out as a tape in headlights exploded to the upside as the brokerage acne, crude dumpage and a (cough) helping hand applauded the effort. We noted the dry eyes in the financials on this morning's Buzz and that was my tell that something bigger was afoot. Now, with the feeding frenzy underway, it's time to take a fresh look at the state of the union.
The most immediate road signs are the 200-day moving averages in the S&P and BKX, both of which are being tested as we speak. I offer that thought with a grain of distain as the technical landscape has given more false signals than my high school prom date. Indeed, in the totem pole that is our metric assimilation, I think it's fair to say that psychology is currently atop both fundamentals and technicals. I'm not sure where the structural metric fits in (the corporate bond market breathed a sigh of relief before their equity brethren) but it's somewhere near the top.
We mapped out Hoofy's perfect storm this morning and three elements (ramp/crude/technicals) have seemingly fallen into place. I can't say if the final leg will be placed under his table (Dubya in a runaway) but the stage is certainly set. I've got some strong thoughts about the "convenience" of this rally but I'll leave that for another day. Suffice to say that the stock market is the world's largest thermometer and the mercury is rising tick by tick.
So here we are--there are a host of reasons to be bullish against a backdrop of uncertainty and risk. And, by extension, this rally will either be viewed as the early stages of the next great upside leg or a sexy siren that beds the bulls. For my part, my approach has remained constant---I went home with some puts and rented exposure when I heard the brokers quacking. This type of trading will likely mute my reward but it'll also mitigate my risk, which is what my objective is during times of market uncertainty.
Deep breathes as we juggle worlds and try to make sense of it all. There's a lot going on, my friends, so think before you act and factor all outcomes into your probability spectrum. It takes a ton of effort to make some coin and a momentary lack of judgment to give it all back (and then some). Step by step and day by day--before you know it, we'll arrive at our destination and the journey will be over.
As always, I hope this finds you well.
No positions in stocks mentioned.
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