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The Art of Perception


Structural impediments?


Welcome to the Grand illusion
Come on in and see what's happening
Pay the price
Get your tickets for the show


Good morning and welcome to the main stage. It's Freaky Friday in Critterland and there's one more day to make a stand. On the left side of the trading band, there's S&P support demand. On the other side (in Boo's command), there's an upside line drawn in the sand. Will the bulls stand tall and shine as planned? Or will pain emerge and strand the hand? The fire flames will now be fanned as tensions mount, grow and expand!

The minxy theory of relativity states that, when a market is on its heels, bad news--that's not horrible--is perceived as positive. Conversely, when the tape is extended, good news--that's not great--is taken as a negative. That's the burden Intel (INTC:NASD) now shares as we wade through the December affair. There wasn't a single expectation of a disappointing mid-quarter update heading into last night. The state of their union was solid--they chopped off the lower end of their guidance range and upped gross margin expectations--but, with some looking for an outright "guide up," the stock is off a bone.

Away from the obvious range (S&P 1060-1075), the overhead levels (Dow 10,000, NASDAQ 2000) and a "binary" feel from most traders, the year end backdrop is adding tension to the apprehension. As Senor Brodsky pointed out this morning, there has been some curious action in certain sectors--some high fliers, most retail, small caps--and those are inputs into the larger trading mix. Remember, trading is a game of statistical probabilities. The more ingredients you can identify, the better taste you'll have for the tape.

During dinner last night with the kid, John Succo and his wife Terri, we marveled at the coincident action in gold, the dollar and equities. "One of these bad boys is gonna be really wrong," I remember one of us saying between courses at Mr. Chow, "we've just gotta identify the timing." Indeed, the metal has been to the peddle for some time and it trades like, well, gold. The question I'm pondering is whether the trade has gotten too "crowded" and begs a pullback (before, in my opinion, going higher) or if the stories of the massive "buy stops" above the market will pull the commodity to nose bleed levels.

Oops--there goes Beeks. In the immortal words of Tommy Callahan, "that'll leave a mark." As with Intel, the only whispers I heard (for this data) were to the upside so it'll be interesting to see if Hoofy can muster the moxie to shrug and hug anew. The balance, from a trading perspective, is how many longs are trapped (for the breakout) versus, well, the breakout itself. Thus far, the Minx is meandering above the magical line in the sand. If (when) that cracks, the bulls will have to show this tape of will what will really is.

Good luck today.

position in dia, qqq

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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