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Sucker Punch!

By

Fare ye well!

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Dressed myself in green
I went down to the sea
Try to see what's going down
Maybe read between the lines

(Grateful Dead)


Talk about a terrapin station! Chanting "fear the turtle," the buyers came out in force once S&P 1040 fell. The resulting squeeze was fueled by multiple sevens to buy in the SPY (mostly covers) and, as discussed, the other buyers were higher. The question now becomes one of magnitude and attitude.

I got stopped out of a bunch of my peripheral (day trading) exposure as discipline trumps conviction. With that said, I am using this rally as an opportunity to add some of the longer dated paper. I don't think Boo's spew is complete--not by a long shot--but I'm unsure whether Hoofy can keep juggling the chainsaws into expiration. The path of maximum frustration may dictate that November paper expires before a return to Red Dye Junction.

There's little doubt in my mind that this is a short-covering rally. The zillion dollar question is whether it'll plant seeds of grandeur in the underperforming mind's eye. I don't 'think' it's gonna last...but I also don't know when it's gonna fail (hours or days). Watch NDX 1380 as a potential pivot point as we figure it out.

It's worth noting that the brokers are conspicuous in their absence of participation. That may be a function of simple rotation (into higher beta names and away from the smoke) or it might prove telling. This is a fairly important close from a psychological standpoint. If Snapper gets beat down, it'll quell the ground swell. If he can giddy up the pup, the fur burning will continue.

On that note, I'm gonna juggle hats and tickle ticks as we round third and eyeball home. I sincerely hope you managed the force today and, if not, that you've got the balance to keep it in perspective.

Have a peaceful night.

position in qqq

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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