By Todd Harrison Dec 19, 2003 8:28 am
Expiration action typically bookends a quiet day.
"The future has not been written. There is no fate but what we make for ourselves. I wish I could believe that. All my life my mother told me the storm was coming, Judgment Day, the beginning of the war between man and machines. It hasn't happened, no bombs fell, computers didn't take control, we stopped Judgment Day. I should feel safe, but I don't, so I live off the grid --- no phone, no address, no one and nothing can find me. I've erased all connections to the past, but as hard as I try I can't erase my dreams, my nightmares."
--John Connor, Terminator 3: Rise of the Machines
Good morning and welcome back to the future. The quiet storm has become the norm and the bulls are feeling fuzzy and warm. "What will it take for you to believe?" asks Hoofy the bull (the ursine pet peeve) "I've done all I can to show you the way and if you don't step, a high price you will pay!" A frazzled blue Boo (with nary a clue) stepped in from the cold to battle anew. "I hate to admit that there's reason to quit, especially now that the bears have all split!" Can anything stop the upside express and turn these green fields into a red mess? It's a witchy new day in the Minyanville fray so saddle up Sally and lets go get paid!
T-8. That's how many sessions are left in the trading year and there are two camps left by the bonfire. The passive gorillas are content to watch the tape and as long as it holds, they're not gonna fold. The active captives are in there fighting for every tick, every basis point, every penny. There is certainly a lot of pushing and shoving but there's been precious little motivation on the sell side.
For the bears, it's been a long, hot summer and a cold, dark winter. I think John Connor has ample reason to worry but, as we know, irrationality can outlast solvency. As I sit here and write, my eyes are scanning the major indices and what are, by all accounts, pretty snazzy looking charts. There are surely resistance points floating around--if you look at enough time frames and sectors, you can usually find support for any thesis--but, for all intents and purposes, the bulls are large and in charge.
As Don Henley has so eloquently said, "Who knows how long this will last, Now we've come so far, so fast." The powerful agenda (including, but not limited to Elmer squeezing the investing public back into the market) is still in motion and most are convinced that we're on the verge of a new boom. I was talking to a friend of mine last night--someone not in our business but heavily invested in the market. "I own stable blue chips," she said, "so I'm not really that exposed." I told her, as I often tell you, that while it's darkest before the dawn, it's equally as sunny before dusk.
Today's four witches usher in the final expiry of the year and then the holiday season will officially kick off. I can't tell you if we'll 1999 into 2004--I simply don't know--but we should get a truer feel for the underlying supply/demand after the December paper comes off. While our "eyes" tell us higher, the VIX, dollar, insider selling, twisty S&P stochastics and giddy sentiment are trap doors and creaky floors. You can trade 'em anyway you want (as always) but please be mindful of the two-sided risk.
On a housekeeping note, Professor Brodsky is under the weather and may take a day away from the fray. He will be writing the trading diary next week (and continue through January 7th) as I put my year to bed and take a much needed respite to recharge the batteries. Minyanville will be rolling out a ton of new features in February--new writers and trading tools, the University, elementary school and more--and I think you're gonna really dig it. Thank you for your continued support, positive energy and good vibes. Ths best is yet to come.
Good luck today.
No positions in stocks mentioned.
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