The Rat Pack
You never give me my money
You only give me your sympathy
'Cause I keep on running
There is no way to catch up with me
Alright, so I'm sitting here this morning going through my usual routine. Cup of Joe in hand, I shuffled through the morning research, scanned a universe of charts, bantered on IM, read my mail, looked at the calendar, went over my positions and watched Fokker like a hawk. The kid is here by 6:00...but I can swear he doesn't wake up until 10:00!
A few early observations. While reading my trusty Dorsey Wright report (where's Pepe?), I noted that the percentage of NYSE trading above their 10-week moving average has given a sell signal. They (correctly) make a point that topping is process-driven (while bottoms are usually point-driven) so, in all fairness, this qualifies as a single feather in Boo's cap. On the same report, they also point out that the VXO (old VIX) has broken the downtrend line for the first time since November 2002. So let's call it two feathers...which I suppose is apropos for chicken little.
Berko and I used to muse that there is usually an "easy" trade each session and we always strove to identify it. After yesterday's ugly close and another 3% shave of the Jinx, we power up this morning to find green futures. If I had to venture a guess at the "easier" trade today, it would probably be the initial downside probe. Is that advice? Nosiree Bob...I'm just thinking out loud as we step off the cloud.
Here's the tricky kick. With all of the negative headlines, the notion of a screwball squeeze was floating around my keppe during this morning's shower (I always have my best thoughts in the shower--and no, not in an American Beauty sort of way). As soon as I logged in this morning, however, four separate contacts told me to buy the dip. Maybe I'm over-thinking this, but with Snapper having developed cult status, I'm wondering what it will take to knock him off his perch. Remember, the bigger they are, the harder they typically fall.
I feel pretty strong about the big picture blues but I'm gonna let the Minx tell me what type of mood she is in today. My humble sense is that, while there may be sucker punches in between, trading from the short side (at least) until BKX 900 and S&P 1000-1015 may be the stream (not the salmon). That's the shorter term stuff, granted, but it's on my mind and now it's on your screen. Watch the financials, breadth and General Electric (GE:NYSE) for clues.
Hit 'em hard.
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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