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Prophet and Loss

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Hoofy sure is getting cocky these days!

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My time coming, any day, don't worry bout me, no
Been so long I felt this way, ain't in no hurry, no
Rainbows end down that highway where ocean breezes blow
My time coming, voices saying, they tell me where to go


(Grateful Dead)


The afternoon trading continues its fix as traders juggle the flickering ticks. We're left to ponder, after this wander, if it's bullish, bearish or a Sammy samba. Hoofy believes he's got nothing to lose but Boo seems to think that he's lit the fuse. Which of these views is destined to lose? Come with me, Minyans, and let's sniff out the clues.

Strategy starts with time horizon and the uberest of uber-short term technicians are focused on S&P 1045 and NDX 1390 (50-day)/1400 (1380 was the tech level throughout the week but, now breached, that becomes nearest term support as the 50-day and 1400 [November 11 low] assume resistance status). With that as a backdrop, the daily tea leaves are begrudging battles.

The bears are focused on the brokers (continue to be heavy), the breadth (turning but not confirming yet) and the macro landscape. The prospect of trade tensions with China, uptick in terrorist activity, recent dollar squalor and mutual fund madness add up to no good, they'll argue, and it's only a matter of time before it matters. In their estimation, expiration stickiness is holding up the market and when it goes, it blows.

Hoofy, listening to Boo's soap box, will offer that he's heard it all before. "There may be writing on the wall but it's a wall of worry," he says, "and you know what they say--never short a dull market." He's watching the breadth slowly turn, the dollar creeping back, the biotechs lead, Citigroup (C:NYSE) starting to lift and the bears getting anxious. "I'm telling ya, Toddo, the trend is your friend."

They both make valid points and, heck, they may both be right (depending on the time frame). I've been trading around my gamma with a short bias but remain respectful (of the upside) through expiration. It's getting thin and thinner into the holiday shortened week and when that happens, agendas can be exacerbated. I'm not sure when (or where) this upside retracement ends but I believe it will (humble opinion). When it does, it should get fugly in a hurry.

In the meantime, we're dancing higher and tickling the zones du jour while the tone seems squeezy. This is a frustrating week for both the bulls and the bears so if you're schvitzing, you're not alone. Monday's melty Snapper, Tuesday's fade to black, Wednesday's grind higher and today's head fake shake. And to think...it's only going to get thinner tomorrow and next week. Oofa!

As always, I hope this finds you well.
position in qqq, spx

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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