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War and Peace


OK--you wanted fear, Toddo? I'm so scared I could poop sprinkles!


War going on across the sea
Street soldiers killing the elderly
Whatever happened to unity?
It's like that-and that's the way it is


Hans and Franz Blix (UN arms inspectors) are on the tape talking about how "deeply disappointing" the Iraqi arms declaration is-SHOCKER!-and the prospect of war is slowly seeping into the market's collective mindset. This is exactly the type of news the bulls didn't need to hear as they try to mount a comeback but, despite my bearish posture (one leg), I'm keeping my right hand up. There's a part of me that is wary of a potential bear trap and I won't hesitate to elect my stop if it's triggered (currently S&P 900).

It's another quiet day in the street (so far!) and, as such, I wanted to quickly walk you through the process of an NDX rebalancing. Fifteen names in the NDX 100 are going to be removed and fifteen new names are going to take their place. Let's say that the average price of the "deletes" is (for arguments sake) $1 and the average price of the "adds" is $5. In order to raise the money to pay that incremental $4, index funds will have to sell the other 70 (unaffected) names (the actual calculation is based on capitalization, not stock price, but you get the gist). I am hearing, and this purely conjecture and NOT actionable, that the sell pressure on the index (into tomorrow's close) could be (up to) $750 million. I'm not gaming it, mind you, but I wanted to be your ears on this one.

First things first, we have a few more hours in today's session to deal with and despite mixed signals, I'm sticking with my bear costume for the time being. For some reason, my eyes keep migrating back to the Cisco heaviness and the Microsoft reversal (down) and, despite the relative traction in the financials, I'm not feeling it on the long side. Yes, there is a cluster of support and sure, the internals are hanging in there-but I can think of many reasons the market should be lower and only a few (cute) ones why it should rally. But hey-that's just my humble've got to make your own choices.

Meanwhile, Grandpa Neil Glassman has blown my socks off with a $5000 bid for the one-of-a-kind, signed by all, 13" x 19" mounted and framed critter poster (see below)! He has had the honor of meeting Ruby and, as 100% of the (tax-free) proceeds go to his foundation, Neil has stepped up! We will now be using strict $250 increments on the bidding so, if you want to play, send in your best bid to Good luck....and thanks, Neil. I love you man!


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No positions in stocks mentioned.

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

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