I can't believe that I didn't win "best dressed!"
"Show me all the blueprints. Show me all the blueprints. Show me all the blueprints... show me all the blueprints... show me all the blueprints... show me all the blueprints..."
Howard Hughes, The Aviator
Good morning and welcome back to the tip-toe shack. With trading ranks thinned from a short week with snow, Hoofy stepped up for three grins in a row. While volume was light and tensions were high, the Matador Crowd just chewed through supply. "I thought that we had the Minx on the ropes," said Boo to his crew of self-loathing dopes, "but just as we readied to ski down the slopes, a terrapin turn diminished our hopes!" Can beaten down bears climb back in the game and steady their shot with precision aim? Or should they prepare for more of the same and simply accept a posture of shame? It's time to find out as we prepare to thrill and ready anew for a romp through the 'Ville!
Heading into President's Day weekend, I mapped out a landscape that "made sense" from where I sat. The tape was too lofty (with resistance looming) to power higher without a pullback or pause. The all-of-a-sudden realization of the daunting dollar dynamic seemed to jibe nicely from a timing standpoint. That seed sowed throughout Tuesday's woes until a "counter-trend" jiggle giggled us back to resistance. The intuitive fail point arrived on Friday but the bulls (with some help from a gorilla) shaped a renewed psychology into the weekend. And so here we are--basically flat week over week but the bulls feeling like they just scored an Oscar.
The bovine do have a few reasons to feel encouraged. The breadth has been buff, M&A is white hot and leadership has emerged in the semis, homies and trannies. Sentiment has also shifted despite Boo landing a monster left that had Hoofy seeing birdies (or ducks, as the case may be). And despite the obvious non-confirmation of volume, piggies or the Nazz (not to mention the morning Biogen (BIIB) debacle) , the bovine have again set their sites on the looming acne above S&P 1118 and DJIA 10,860. That is the immediate task at hand and will help determine if the bovine "shake" is a thing of the past or a prolonged process in present tense.
The bears will stare at the eye-popping CRB and wonder when margin contraction will kick in (PPI vs. CPI). They'll also note the fragile volatility levels, delicate dollar and the debt-induced "recovery," subjective interpretations that are potentially problematic should causation occur. There is a familiarity to this juncture although it also feels like fertile ground in many ways. It's almost as if we "know better" than to blindly believe but it hasn't mattered yet so it's not yet a problem.
We power up this minxy pup to find Europe mixed, Asia firm and the dollar giving some greenback. While we have a spate of Beeks littered in our midst, the meaty mid-quarter updates won't begin until next week. That leaves technicals (BKX 100, SOX 440), structural and psychology as the mainstay metrics that will pave our way and pack the plot. Keep your head on straight, your eyes fixed forward and your energy positive. With a little luck and a bit of patience, we'll turn the corner into March with a smile on our face and some jingle in our jeans.
Good luck today.
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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