May peace be with you!
Clowns to left of me,
Jokers to the right,
Here I am
Stuck in the middle with you.
The Hump Day afternoon was slowly edging along when POW! the Fannie Mae (FNM:NYSE) news hit. Before that happened, I had just opined to my good friend, Neil Glassman, that "it" would seem so obvious with the benefit of hindsight. What wasn't (and still isn't) obvious, however, is from where the scare will birth the bear. Is a "fail" at S&P 1050 textbook or does the Minx have to first take out the S&P 1060 level if she's to travel the path of maximum frustration? This is some way to spend the day!
Over in flow's diner, we've seen some size towels tossed in the form of QQQ and SPY. A couple of million here, a few million there, ya know, chump change. That's not to say that there isn't institutional buying out there (there is), but the coverfest is particularly poignant today. I can't say I blame 'em--the tape is firmer than a college cheerleader--but I wanted to pass the news along nonetheless.
So all eyes will shift to Beeks and his early morning release of GDP (among other economic reports). As I said above, the sharp lift right to S&P 1050 will seem pretty obvious if we gap lower tomorrow morning. Massive short covering into the "event," we filled the gaps (both S&P and NDX) and tickled the "broadening top." On the other hand, the tone (breadth) of the tape has been snazzy, performance anxiety is running rampant and, hey, the trend (lines) are your friend. Daisy, quick...grab your broomstick!
I will offer this. Whenever a "number" is so widely anticipated, the subsequent trading is often convoluted. That's why Boo was wondering earlier if he wanted to see a huge print or a feeble one. We've seen great news get bought in the past and bad news get gobbled. My point? Craft a risk profile that allows you to sleep well and check your emotions at the door when you arrive at work tomorrow.
I'm gonna swing by the Garden tonight and attend (what might very well be) the last Knick sell-out of the season (thanks Paul). With the exception of my beloved Orangemen, it hasn't been a banner sports year for yours truly. Still, whether it's sports or life, ya gotta take the bad with the good and appreciate that you're in a position to take anything at all. For when the final buzzer sounds, all that matters is that you enjoyed the game.
Have a peaceful night.
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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