Unleash the Hounds!
I don't have a thing to wear!
Good morning and welcome to Elmerlot. Despite Boo's best fright (and a pretty good fight), Hoofy rode into town like a medieval knight. Armed with support, he held down the fort and jousted the bears who dared to be short. Is this rally attempt a good chance to be fadin'? Or will Hoofy prevail before mounting thy maiden? It's a brand new day and the pickings are sparse so settle on in and let's go kick some arse!
Entering the new week, the bears had Hoofy right where they wanted him. The Nikkei got spanked for three percent, uber-important support was fraying at the edges and tech bellwethers--namely Intel (INTC:NASD) and Microsoft (MSFT:NASD)--had found (early) supply in the street. All Boo had to do was step on the fingertips of the cliff hanging tree huggers and voila!, supply-side economics would have kicked in.
Of course, and consistent with recent history, our frazzled furball couldn't close the deal. The financials established leadership, the pressers never broke the bank and, when they didn't get 'em down, a group hug emerged. With year-end edging closer and performance anxiety worthy of Viagra, traders are left with the obvious question: is the writing already on the wall of worry?
We know where Hoofy is coming from. The S&P broke out and (successfully) retested 1060, the NDX looks like it could be flaking with reverse dandruff, there's fresh short meat in the marketplace (financials) and, heck, this is the very definition of a Burned Razor! They tried to get 'em down, he'll argue, and that lightening quick November belch was the best they could do. Onward and upward.
Boo? He's a grumbler these days as he watches (what he feels is) the demise of our capitalist structure unfold before our very eyes. "It's not rocket science," he'll say in a hushed tone, "the gold/dollar duopoly is telling you all you need to know. Furthermore, the traditional caveats--be it greedy complacency, insider sales or unrealistic valuations--are being mocked by the flock. The sad part is, when this thing unwinds, it's gonna swallow us whole."
Truth be told, they both make valid arguments to a degree. It's no secret that I've been an equity bear--I don't hide from my mistakes, I learn from them--and I genuinely fear for our financial future. The issue at hand is one of timing--when will the dollar matter? When does debt come back to haunt us? How many bubbles can we blow before learning our lesson? I'll say this--guys like Soros, Buffett, Rogers, Gross...they're no dummies. If you harbor concerns or reservations, you've got some snazzy company.
As discussed yesterday, and in the vein of taking our journey one step at a time, Hoofy is running a ball controlled offense above S&P 1060. On the heels of his latest first down, the global markets have moved the chains and are awaiting the signal from the offensive coordinator (Elmer). With the clock ticking down (and the dollar ticking lower), each play assumes added significance. These Fed sessions are typically bipolor and are broken down into two distinct periods: B.E and A.E.. As such, trade forward with the knowledge the weather conditions will change after 2:15.
Finally, we're beginning our first holiday auction today and the critters are getting pumped. The winner will join myself, the Minyanville professors, the cast of critters, Mike Santoli, Fokker and the rest of the team for an evening of cheer and chatter. The dinner will be on Wednesday, December 17th in New York City and there are two seats unspoken for. Net proceeds will be donated to the Ruby Peck Foundation for Children's Education. See you there!
To bid on this item, click here!
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 email@example.com.
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