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Buffalo Soldier


I could really use some time away from this whippage!


There's battle lines being drawn
Nobody's right if everybody's wrong
Young people speaking their minds
Getting so much resistance from behind

(Buffalo Springfield)

Talk about a flurry! I'm not talking about the dumping we got over the weekend, I'm talking about the humping that's going on in the marketplace! We got our requisite fade off the opening giggle and it's morphed into our first test (lower) near S&P 1075. Now it's time to find the rhyme--let's take a look.

Traders are a funny bunch in that they tend to be A.D.D in many ways. Last night, when the futures opened (S&P up 16, Nazz up 28), the only fear was not being long enough. By 10:30 this morning, the mood shifted to "holy cow--am I too long?" That illustrates an important point that bears repeating. You should always respect the price action but never defer to it. If you fall prey to the former, you'd buy high and sell low. For those new to the market, that's not a good thing.

Turning our attention to today's Minx, there are mounds of crosscurrents in play. The dollar index is now down on the day and that's raising eyebrows in trading circles. Equities remain firm (if not firmer) and the breadth is 2:1 to the positive. We've seen multiple put buyers in the S&P (someone just bought another 3500 December 1075 puts) and as it stands (don't blink) the tape is absorbing that hedge.

The action (reaction) today is pretty important from a psychological standpoint. If we close on the highs, Santa will be pretty psyched as he eyes the last few weeks of the year. If we can't hold the gains and close lower (see the dollar), it'll quell sentiment and introduce the prospect that rallies end on good news (not bad). Further, and oh by the way, we now have some pretty meaty gaps below Friday's close. That may not matter for today but rest assured, they'll eventually come into play.

As per my last post, I faded (sold) the opening and faded (bought) the first test. I now have tight stops set below on the market exposure vs. some defined risk puts in individual situations. Also, Oracle (ORCL:NASD) and Amgen (AMGN:NASD) have news tonight and that should be on the trading radar. We also have a slew of earnings coming in the brokerage space and expiration looming on Friday. In other words, this week has only just begun.

Finally, in response to the many inquiries, the charity auction will end on tomorrow's closing bell. Minyan Neal is currently in the lead with his generous bid of $4000 but I know he's looking over his shoulder. In addition to the Minyan professors and a freshly shaved Daisy (her legs!), my very best sales coverage from around the street will be attending this festive event. A lot of kids will benefit from the Minyan generosity so, on behalf of them and the rest of the Minyanville family, thank you ever so much!

As always, I hope this finds you well.

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