Prophet and Loss
By Todd Harrison Nov 20, 2003 1:14 pm
Hoofy sure is getting cocky these days!
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
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
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