Circle Takes the Square
By Todd Harrison Mar 03, 2004 8:33 am
If anybody is gonna spank Hoofy it's gonna be me!
Good morning and welcome to the full circle. With yesterday's slide on Hoofy's backside, the upside assult was once more denied. While it felt for a bit like the bovine might hit, the bottom fell out when the buyers all split. "All of a sudden, when I turned around," Hoofy mumbled and grumbled through a frown, "my renowned rebound couldn't be found and the ursine freaks began to surround!" Will Boo now chew and get pleasantly plump or can Hoofy pump 'em over the technical hump? It's some brand new flow for those in the know so settle in easy and let's start this show!
What caused Tuesday's...."rest?" Likely a combination of factors--technical resistance (S&P/NDX/SOX), a strong dollar (and the perception that it's bad for equities), an uber-crowded anticipatory bull camp and some potentially hawkish comments from Elmer. When near-term inputs mix with big picture backdrops, it tends to seep into the collective mindset. The question for today (and trading ahead) is whether the liquidity fluidity can flush out these concerns.
Circling back to the dollar for a moment, we opined in this space a few weeks ago that a counter-trend rally would likely be a lot stickier than most anticipated. With the world short the greenback (pun intended), a gut check made sense on several levels. While I'm more of a dollar spender than a dollar analyst, I pulled up a chart of the dollar index (DXY) and noticed a trifecta of resistance at 91.5-92 (trendline from February 2002/multiple 2003 bottoms/200-day moving average). That's a bit higher than we are now (currently 89.4) but I figured I'd toss it out there regardless.
Meanwhile, where the hell is Beeks? I don't mean to play the harp but how do you make a PPI report just disappear? I mean, jeez, if you don't like the number, just make another one up! But don't brush over it and pretend it never existed--that's almost insulting to our (don't laugh) intelligence! We will get the ISM non-manufacturing report (10am, exp. 63.5) and the tan book (12pm) today (I think) so be on the lookout for those in the meantime.
Xilinx (XLNX:NASD) guided to their high end last night but it just wasn't up to the whisper snuff. It'll be interesting to see how the stock reacts today (as well as the SOX in general which slipped at their 50-day). The longer the semis--or the NDX for that matter--churns under its 50-day, the more bearish it is. Hoofy's mission in the rain is to put this level behind him and use it as a floor rather than a ceiling. If he can do that (and the financials can lead by example while the tape has good breadth), S&P 1160 is doable. That's alotta "ifs" but it 'tis what it 'tis.
That's about it on this unseasonably warm day in the city of critters. If any of ye faithful still have questions, thoughts or suggestions regarding the new digs or potential professors, please send 'em on in. Also, if you're interested in becoming a Minyan ambassador and earning while ya learn, we're setting up a critter enterprise program to do just that. It's all a part of the journey, my friends, and if we do it right, everyone wins.
Good luck today.
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