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Fears for Tears


Three in a row as we start the new show?


So glad we've almost made it
So sad they had to fade it
Everybody wants to rule the world

(Tears for Fears)

Good morning and welcome back to the ducks that quack. It was deja vu all over again as the bulls ran wild and escaped from their pen. They've now been rescued two weeks in a row as the bears failed to mount a response apropos. "They say it was Beeks who opened the gate," said Boo to his crew after taking the bait, "two sides remain in this minxy debate and I'm not yet convinced that the ursine will wait!" Is he in denial, this bear with a smile, or will discipline be proven worthwhile? A new week is here and we're ready to thrill so roll up those sleeves as we dance through the 'Ville.

Friday's payroll report was, according to the weekend press and mainstream media, the latest validation that the economy is accelerating. Forget, for a moment, that none of the other asset class action supported this assertion--bonds were up, the dollar was down and metals shined like a crazy diamond--or that there is a vast difference between legitimate growth and debt-induced delight. In the era of immediate gratification, it's easier to assign this reason for rhyme and leave the dark spots for another day. The question that we must answer is whether that day is as far away as most seem to believe.

To be sure, there are technical reasons to be constructive. The S&P and Dow both broke out above their respective resistance and registered 52-week highs. The action in the Trannies, Homies and Utes was equally fabu and warrants respect regardless of posture. And then there is the "window of opportunity" that allows for further reflation before the dollar "really" matters to holders of our debt (read: fixed income selling and higher rates). In fact, from some of the conversations I had over the weekend, it appears that foreigners, as a function of the grubby greenback, have been the latest round of stateside equity demand.

I opined late Friday on the Buzz that I sensed the Minx would be lower a week from now (then). That may be spittin' in the wind but it isn't as rouge as it appears on the surface. Volume, for one, wasn't spectacular despite the cheerleading from all peripheries. Hoofy will argue that is bullish (non-believers) but, when coupled with the non-confirmation of the techs and piggies (both well below 52-week highs), it's worthy of a nose scrunch. Toss in the lopsided sentiment surveys, uber-complacent volatility levels and (near) all-time highs in crude and you have the makings of a massive off-sides.

I am careful not to be too cautious as I can "see" long squeeze potential and respect the powers of a prolonged agenda. With that said, and while this won't be this week's business, I wanna note three dynamics that have become obsolete in risk management assimilations. The first is the yield curve which, while flattening, will likely invert for a prolonged period before it is deemed problematic. The second is the tensions in the Middle East and the geopolitical fragility that has cost observers performance over the years. Finally, and at the risk of you rolling your eyes, the real estate bubble, which is absurd as NASDAQ 5000 before it burst and rained pain instead of champagne.

All of these inputs don't (won't) matter as long as the screens are green but are worthy of staying on your radars. My antennas are particularly vibing on the last point as housing flippers are the stock jockeys of paradigms past. I can't say where we are in this popular game but I'm fairly certain we're in the late innings. And while I'm quite conscious that alotta market observers lost credibility trying to call this market top (something that I'm NOT doing), it would be myopic and fiscally irresponsible to pretend that it doesn't exist.

We power up this Minxy pup to find a relatively flat world. The last two starts of our work week were greeted with an ursine smack and that isn't lost on tape watchers. Still, on the heels of the latest spate of "things are great," we must allow for spurtage and respect that catalysts are littered throughout this five session span. Define your horizon, read the tea leaves and understand that the greatest wisdom is knowing that we know very little. With a bit of discipline and a steady hand, we'll chew through this week with some jingle in our jeans.

Good luck today.


No positions in stocks mentioned.

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

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