Yesterday's late ramp was motivated, in part, by the "unwind" of short equities vs. long Euros.
Love is the only thing that can save this poor creature, and I am going to convince him that he is loved even at the cost of my own life. No matter what you hear in there, no matter how cruelly I beg you, no matter how terribly I may scream, do not open this door or you will undo everything I have worked for. Do you understand? Do not open this door!
--Dr. Elmer Von Frankenstein
Good morning and welcome back to the reanimation of the dead tissue. With the most recent sprint and sharp upside print, the Minx cracked the door to the trading mint. The uber-strong showing seemed to keep going and left our young bull both gleaming and glowing. With Boo feeling stunned and his back to the ropes, can Hoofy now end the bear's downside hopes? It's Hump Day again in the critter domain so let's climb aboard the Minyanville train!
Yesterday's traction and upside reaction began to get legs after Elmer's distraction. The Fed chief tiptoed a very fine line and offered no grist for a near-term decline. With the bulls clearly hosting a hot ursine toasting, there was little to stop a continual roasting. The bovine regime, with newfound esteem, then took the excess to an upside extreme.
At the end of the session, despite his depression, Boo posed to his friends a very good question. "I'll give you some snaps for your moxie, perhaps, but all that you did was fill those fat gaps." The chart formation is a keen observation but it's too soon to tell if it'll offer salvation. "I know that a breakout is what the bulls seek but the levels we're at all were seen just last week!" Our once proud young friend offers a good perspective and that should be factored into any directive.
Hercules Hoofy, toga in hand, will be quick to point out his lay of the land. "He held the trendline during last week's decline and that should have been the obvious sign. When yesterday's jig sucked in all the holders, we broke what was once a sharp head and shoulders." Our bodacious bovine will also opine that the gorillas out there all turned on a dime. "The trade in the street, among the elite, is long Euro's vs. short equities. It had an impact when the Euro was smacked and the equity leg was strongly intact."
As we enter today's equity fray, the levels out there will all come in play. At S&P 1050-1060, the bears will pitch camp and try to put down this equity ramp. The other side of the ride, if the bulls are to glide, is S&P 1036-1040 (that's where Snapper might hide). It's gonna get tense in the trading society as everyone's feeling performance anxiety. Take a deep breath, we're about to begin and remember, my friends, that it all starts within.
Good luck today.
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 email@example.com.
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