Maybe I didn't shop enough!?
"The NDX is now down over 7% from Monday's high and there will inevitably be a point when the dip buyers pause to reassess their strategy. We know that the recent rally has squeezed a lot of bears out of their shorts and sucked new money into the market. The fate of the year-end tape will rest with how these longs react to adversity and how many buyers are left out there."
--Todd Harrison, Minyanville, December 5, 2002
Whataya say, vuja de? The last time we walked into work with leftover turkey sandwiches, the Minx was gapping higher and traders were stepping over each other to secure a place in Santa's sleigh. Once Mr. Claus gave pause, the giddy pity kicked into overdrive and put in a rather drab December. Will history repeat or will the fabled Razor Burn invert as we once believed it would? Saddle up Sally...this one is gonna be interesting.
The uber-early sniff is green and giddy and I'm seeing a fair amount of ETF's (QQQ and SPY) for sale out of the gate. The first fade attempt was intuitive and we'll get a truer taste of the tenor once the I to the ISM Manufacturing number is released at 10am (exp. 58.4, prices paid 60). As it stands, there are three winners for each loser and the Minx is (don't blink) holding above S&P 1062.
There is some curious action in Wal-Mart (WMT:NYSE), Lehman Brothers (LEH:NYSE) and Amazon (AMZN:NASD) as all three are conspicuous in their upside absence. Those three sectors should be monitored as they're necessary if the upside trade is to hold water. The semis (and semicaps) and drugs are relatively dry, as is media, networking and the cyclicals (despite Boeing (BA:NYSE)).
I'm gingerly trading around the short side as I believe that this will fade but I'm uncertain if there's a further push first. The internals remain a key and they've yet to show any signs of concern. Take a deep breath, Minyans--the day isn't a half hour old yet.
I'll be back.
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 firstname.lastname@example.org.
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