A Sting Thing
It's getting hot in here (so hot) so take off all your clothes....
If "manners maketh man" as someone said
Then he's the hero of the day
It takes a man to suffer ignorance and smile
Be yourself no matter what they say
The afternoon drift is a bovine gift as all eyes search for further lift. Indeed, after the initial pop, the S&P futures have been in a three handle range all day. Now, traders are weighing whether this is a basing (before the next leg higher) or a churning (ala the Thursday thump). Let's take a quick walk 'round the 'ville.
If the bulls had a checklist of what they wanted to see today, it would include minty breadth (check), leadership from the semis (check), strength in the financials (half a check), good volume (no check), stability in the dollar (it's a dead cat but, still--check) and a breakout above resistance (no check). Hey, we wanted to see what the bounce was made of and, as it stands, it's got some good, some bad and some still under review.
This, of course, begs the obvious question: Is this the beginning of the year end Snapper that we discussed in the Razor Burn? We did, afterall, earmark the end of November/beginning of December so it's a legitimate thought. When the thesis first emerged in my mind's eye, I felt the corrective process was gonna be deeper (than it has been) and strike some fear in the hearts of the holders. If you put a water pistol to my head, I'd say that we haven't gotten there yet.
In the short-term, the upside lines are relatively defined and a strong push through S&P 1050 will should pave the way to the yearly highs (and the plethora of buy stops beyond them). I'm not sold on the fact that we get there but if we breach these levels, I'll balance my gamma a bit more. The keys remain the dollar (and it's sustainability), the financials and how many holders 'need' higher prices in order to sell. Remember, a trapped bull has some downside pull.
I'm jumping into a meeting. As always, I hope this finds you with some jingle in your jeans.
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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