Hey Fokker--you give snakes a bad name!
Larry 'Pinto' Kroger: I was thinking, maybe we could get some beer.
Clorette De Pasto: Nah, not tonight. Besides, you might get lucky without it.
So there we were, Snoop Tone and I, spending our Sunday afternoon at the charity bowling tournament and closely monitoring Pledge Fokker. The kid's mission (and he did choose to accept it) was to hand out Minyanville coupons and help spread the word of our humble little town. Imagine our joy when we spied him putting a particularly hard sell on a young brunette from Columbia University--for over 45 minutes! "She's in the investment club," Greg RN explained to us, "I'm looking at the bigger picture!" It's not a shocker, Fokker, that you've got a little devil on your left shoulder and an angel on your right as we start the trading week!
Boys will be boys, I suppose, and critters will be critters. Speaking of which, the Menagerie is all fired up this morning and they've been anxiously asking me if I'm singing a different tune. "Bro, if I didn't know better, I'd think you're getting soft on me." said Boo dryly from the corner, "what happened to the eye of the tiger?" I explained to our resident bear that there's a fine line between conviction and stubbornness and there's no shame in doing a bit less. "I still see the downside," I opined to him, "I'm just aware of the psychological variance in the marketplace and the importance of timing. I've got a leg in my bear costume (25% conviction on the short side) and I'm still eyeing a defined "stop out" level above."
The SOX index, which was the clear leader on Friday, appeared to have broken out of that obvious downtrend line we've been discussing. A couple of quick thoughts on that development. If you've pull up a chart that includes the intra-day highs and lows (GPO), you'll see that Friday's action remains under the trendline. Also, we must remember that technical patterns aren't absolute indicators (BKX 800?). We've seen "false breakouts" before--the key to successful trading is knowing when to bite and knowing when to fight. Finally, it's possible that the long side is becoming crowded (in front of Morgan's conference) and we must be aware that traders may "sell the news."
Scanning the wires, Jon Joseph at Solly lowered numbers on Intel this morning (due to weaker flash demand), CS First Boston trimmed numbers on IFX and ASML, UBS Warburg upgraded ALA and SYMC, PALM's reading a lower forecast and FDX was raised at JP Morgan. Also be on the lookout for Beeks as he'll be swinging by for a late breakfast and dropping off the ISM (exp.52, prices paid 60) and construction spending (exp. .5%).
Tells today include the semis (conference and technicals), the banks (Solly constructive on credit quality assuming the economy doesn't deteriorate!), the macro tells (oil, dollar, gold), the horsies (big cap tech), the retailers, breadth and our levels. S&P 850 (870) and NDX 1020 are upside resistance while the lows of last week will each provide initial support.
Shake out those weekend cobwebs, my friends, and let's get this party started right. Emotion remains the enemy when trading so if you're looking at those futures with sweaty palms and a tight stomach, take a deep breath and remember that it's a marathon and not a sprint. And Fokker--stop staring at the phone, I'm sure she'll call you back! I just hope the twelve messages you left on her answering machine don't scare her off!
Hit 'em hard.
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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