May peace be with you!
"I'm tired of men always coming and going, going and coming and always too soon. Vat am I, a rabbit?"
Lili Von Shtupp, Blazing Saddles
Another session comes and goes as traders start to eye the close. The Valentine daze is a lazy haze with the real action occurring outside the equity realm. We saw a similar dance last Thursday and openly offered that stocks should have rallied as a function of reflation extrapolations. While that was (and is) an admittedly simplistic observation (the lift arrived a day late), we can't help but wonder if we're now set up for a deja Boo?
Not a whole lot has changed since this morning other than the field position in macro land. With the dollar squalor (-75 bips), we're now retesting the vaunted DXY 84 level that was repeated resistance on the way up. Technical analysis 101 dictates that the time to buy a breakout is on the subsequent retest of the acne and, well, we're there now. And if the greenback gets grubby, it'll quell the metal swell and set up a very dicey dynamic for Elmer's Wednesday revival.
As far as the rest of today's session, there simply isn't an edge that provides an advantageous risk/reward. Hoofy will argue that S&P 1200-1205 provides a bovine backstop and Boo will counter that NDX 1540-1550 is resistance. Both are right, of course, although one of our critters is bound to be bitter. I will simply remind you that discipline is the common denominator of any successful strategy and it's not necessary to play every day, it's only important to have a high winning percentage on the trades you choose to make.
As always, I hope this finds you well.
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 firstname.lastname@example.org.
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