Message in the Bottle
Will somebody PLEASE get me a toothbrush!
And we're standing outside of this wonderland
Looking so bereaved and so bereft
Like a Bowery bum when he finally understands
The bottle's empty and there's nothing left
Good morning and welcome to the glass menagerie. The blindside sack of the nose ring pack derailed the bulls from the upside track. While rolling in dough not long ago, Hoofy was swimmin' in the know. Now, after the sell side show, he's eating crow and limping slow. Will Boo now move in for the kill and usher in a nasty spill? Or can the bovine shake this chill and usher green into the 'Ville? It's Thursday in the critter fray so let's chow down the minx buffet!
All through yesterday's session, it felt as if traders were trapped in headlights. The bulls were praying that Snapper would save the day and the bears, paranoid as they are, had similar trepidations. All the while, the slippy ship eroded the landscape (lotsa 50-days in the rear-view) and concerned chartists have started to wake up. Granted, the major flaw with technical analysis is that stocks are "better" higher and "worse" lower but that's a conversation for another time.
I opined yesterday that as long as the internal dynamic remained weak, stocks would have issues. Sure 'nuff, breadth was abysmal throughout the session and the soup du jour had the taste of turtle. My sense (not advice) heading into this morning's muck is that we'll see a probe lower (after the heavy close)--perhaps to support at S&P 1115-1120/NDX 1450--but they'll hold (and maybe run) in front of tomorrow's monster catalyst. From there, it's up to Beeks, the orange crop and the collective psychology.
While at the gym last night (not a typo), I got into a discussion with an old friend about the state of the tape. He asked me what I thought and I shared the above view but cautioned that the political landscape MAY, in fact, be the greatest head fake in recent memory. With everyone--and I mean everyone--on board the "they're fine till the election" trade, the boat is clearly one sided and vulnerable to capsize. I will offer this--just so it's out there--IF Edwards jumps on Kerry's ticket, the tape could get thwacked but good. Just thinkin' out loud (and no relative edge) but wanted to share.
Alright, key reads today include our levels, the semis (snappage), the financials (please read "Ahead of the Tape" in this morning's Journal), the cyclicals/trannies (S's deepest in the corrective process), the internals (best tell), internets, telecom (Cisco (CSCO:NASD)) and the biotechs (acne vs. blemish). Also, please understand that today's trade is all about posturing in front of tomorrow's number and it's likely to get a 'lil nutty into the close.
On a housekeeping note, I will be traveling tomorrow where the prairie sky is wide and high, deep in the heart of Texas. I'll be monitoring the number from my home office (and will try and flush out a morning Randoms) but rest assured that you'll be in good hands. Professor Brodsky will be penning the diary and the rest of the clan will do their part. Thanks kindly for understanding as I bite the bullet and practice what I preach.
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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