A Bucket a' Muck!
You imagine me sipping champagne from your boot
For a taste of your elegant pride
I may be going to hell in a bucket, babe,
But at least I'm enjoying the ride
The slinky Minx edges into the afternoon and--don't blink!--Boo is on the move. The progression was relatively straight forward--Snapper emerged and took the Nazz right to resistance, the breadth failed to confirm, Dubya mentioned "ball bearings," stops were elected below S&P 1135 and Dow 10-4 (the bottom of the channel) was taken out. Now it gets interesting.
We mentioned on the Buzz that Collins and I are starting a scale tale...and we also mentioned that the put/call was steadily dropping all morning. Now, with the NDX a kitten's whisker away from the first 10% correction in a mighty long time, the test begins. The caveat of buying stocks because they act well is that, by definition, you lose your catalyst after they've reversed. Trailing (upward) stops is one way to offset that stylistic flaw and options (which were 20% cheaper last week) are another. Still, the dip shtick has been good and thick and we're now officially in multiple dip mode.
How will Hoofy react? Today's close should offer some meaty clues. The velocity of the selling picked up once the "stops" were elected (under S&P 1135) and DJIA 10,400 broke. If the bountiful bovine can recapture that line, Snapper has a shot. These type of levels offer good risk/reward points for active traders although, with so many hedgies focused on 'em, you may wanna give yourself some wiggle room.
This is a critical area for the Minx--S&P 1137 was the 50-day, we're sitting on the trendline (from the duct tape lows) here and S&P 1125 is huge (2004 lows). I wouldn't be shocked to see the troops try and rally although I'm pretty much "out there" with how I feel. The divergences, sentiment and broken charts make this juncture a bit more feasible for Boo's crew. If I've learned anything over the last year, however, it's to respect the power of an electoral agenda.
Quite busy--lemme hop. As always, I hope this finds you kickin' ass and taking names.
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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