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Campfire Follies


Hey Boo, enjoy it while it lasts!


If mercy's in business
I wish it for you
More than just ashes
When your dreams come true

(Grateful Dead)

The thataway market continues as the initial flurry higher tickled our breakout levels and retreated in kind. I spent the better part of the first hour making calls around the Street and, as you might have guessed, most of my contacts were constructive on the tape. For my part, absent a small fade, I didn't trade in the first hour as I wanted to let the initial emotion seep out of the tape.

What stood out this morning? The firm dollar and heavy treasuries, for starters, and that should be factored into the structural portion of our metric brew. Perhaps it's too scripted, but I continue to view the dollar as the single most important element of equity stability. It was also worth noting that the BKX failed to make a new high (vs. last week) and my eyes are fluttering between Citigroup (C:NYSE) and Goldman Sachs (GS:NYSE) in that complex. The breadth in the S&P, meanwhile, was flirting with a 2:1 positive reading but -- blink and 'ya missed it -- has since turned negative.

While the day is far from over, the early surge (and subsequent failure) are tell tale signs of an anxious tape. A burnt Boo was even tempted to nibble on some tech crackers as they peeked through NDX 1085 but chose instead to see how the Minx responded to the dual resistance zones. I told our furry friend not to celebrate yet, however, as each test of resistance (support) absorbs a wave a supply (demand). As such, each subsequent run (fail) has increased odds of success.

The two sides to the recent rally portend vastly different potential outcomes. The performance anxiety in fund land has heated up and portfolio managers are conditioned to buy the dip. As we know, that'll work until it doesn't but until it doesn't, it's self-fulfilling. As a function of that sentiment shift, however, the long side is clearly crowded and when (big when) the first, second and third dip fails to hold, it'll be a downside mess.

Is this a new bull that requires less risk premium or is this the very definition of complacency within the context of a bear market? My vote is for the latter and, while I respect the potential for a bullish phase within that bear cycle, I can't bring myself to trust this tape. The issue, as always, is one of timing and that's what continues to elude Boo's brethren.

On a personal note, today marks the second anniversary of Ruby's passing and I want to take a moment honor my best friend. Rest easy, R.P, you continue to shine through the many people whose lives you've touched. Family, dignity and respect -- you've taught us well.

Hope you're all faring well. I'll be back.
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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

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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