By Todd Harrison Nov 12, 2004 8:47 am
I resemble that remark!
"Hey, I hope you don't mind, I got up a little early, so I took the liberty of milking your cow for you. Yeah, it took a little while to get her warmed up, she sure is a stubborn one, whew!"
--Roy Munson, Kingpin.
The freak has arrived so you better make way as the critters are here with plenty to say. It's been a long week (we know all too well) and we'll need to pay heed before a farewell. "My mojo is rockin' with green ticks galore," said Hoofy the bull of his bovine rapport, "for all of you Minyans who haven't kept score, the ursine are taking a beating hardcore!" Can he run the shoe and punish poor Boo or will the young bear step up for his due? It's freaky, it's Friday, it's gonna thrill so roll up those sleeves as we romp through the 'Ville.
The last thirteen sessions have been a bit nutty. The S&P has ripped 80 handles, the NDX has gripped 110 points and the psychology pendulum has swung from cautious conservatism to a giddy grab-a-thon. There's no denying the voracity of the move and trying to explain it away is a reactive rationalization that borders on denial. The bulls saw the hole, they hit it hard and ran untouched through the middle all the way to the end zone. Now, as they do the Ickey Shuffle, it's time to tee up the ball and ready for our next perception.
The Horse has been the money bet as he carefully eyes the optimism in the corporate market. It's not a fail-safe perspective, mind you, but it's been pretty darn snazzy since I started reading him four years ago. He has flagged Aunt Fannie (FNM:NYSE) as the loud relative who could upset the holiday party when her earnings arrive on Monday. He's not saying that she gets out of hand but he's cast an eye her way as she waddles towards the door. If she behaves, her friends will likely breath a sigh of relief and down a fresh flack. If she gets drunk on the punch bowl, however, she's liable to spoil the fun for everyone.
I slid into my office this morning and immediately "pulled out" my chart work for some longer-term perspective. What I noticed was an S&P chart that is retesting a rather significant level that I didn't previously see. While it's true that the Minx has broken out of the '04 range, this latest leg has taken us right to the level that "broke" in 2000 and failed three times to bounce back above it in 2002. That may not ultimately matter if the feeding frenzy continues but its certainly worth pointing out in the context of a V-bottom and an overbought condition.
The "eyes" have surely had it of late as the stellar breadth, staunch leadership, slippy crude and overall tone have all been perfect. The flies, namely the breakdown in the dollar, constant bid to the metals and bubblicious action in the microcaps, haven't mattered at all. Traders have been "long the eyes and short the flies," so to speak, but that doesn't mean Jeff Goldblum isn't gonna make a cameo at a point. Momentum is a curious thing in that it works until it doesn't. The long squeeze is on, baby, but this trader will be trailing stops on rentals and looking for cheapie downsides regardless. With the VXO Bar Mitzvah every day, how can I not?
We power up this minxy pup to find Asia enjoying the fruits of their fish, Europe firm, the dollar down again (DXY 84ish) and the metals slightly bid. Retail sales came out a bit better than expected but with RTH up 11% in the last few weeks, it'll be interesting to see how much batter is baked in the cake. As I scribe, stateside futes are marginally higher and the critters are standing on either side of me licking their chops. I just told them that I dropped the ball yesterday and I'm laser focused on making it up to ye faithful. Stay tuned-
Good luck today.
position in fnm
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