Oh sure--like HE went to Harvard!
Turn those machines back on, Mortimer, the Orange Crop report came out and it was much stronger than expected! Is this enough to turn the tide? Is it looking good, Louis? Is it feeling good, Billy Ray? Why are the Dukes so hung up on this number? Simple--in this environment, the bulls need something--anything--to spark the upside and perceived economic traction is their best bet.
The calls are coming in from Monte Carlo, Beverly Hills, London, Paris, Rome and Gstaad and they wanna know if this, alone, will be enough. While a case can certainly be made that the Minx has been acting well given the massive muck, I continue to feel that this "bottom" isn't good enough. Can we rally? Yeah, of course we can. Is my (most) humble opinion that rallies can be sold until a better "bottom" is put in? Yes, Coleman, it is.
With that said, we know that discipline trumps conviction and I'll once again be focused on upside resistance to see how the Minx reacts when she gets there. S&P 846 is the trendline (from January) that we've been discussing and it's the first of a handful of resistance zones on the upside (S&P 850-855 and 870 being the others). Which level you choose to watch and how you approach them is a function of your time horizon and risk profile.
While I'm suspect of the upside, I am also humble enough to know that I'm only a pawn in the bigger picture. Despite the stohastics hooking negatively (SOX, GE) and looming negatives (uncertainty), Wall Street remains a game of supply and demand. In other words, if there are more buyers than sellers, the market will rally--it's that simple. With that said, I've never been one to run with the pack and I'll likely add some defined risk puts into a morning lift.
As I write, I'm hearing the "Saddam to destroy missiles" chatter getting loud again. Man, it's like clockwork! Am I too cynical? Maybe--there was an underlying bid to the tape yesterday and they held in well on the close. Let's look at it this way--we won't have to wait to long to find out!
Good luck today, Mon Frere, and play like a Minyan!
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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