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The Boston T-Party


Six bucks for a bloody?


Good morning and welcome back to the freakfest! Yesterday's flier through the muck and the mire inspired the bulls and ripped the tape higher. "I had zero doubt," screamed Hoofs in a shout, "that the bears would all scramble and scurry about!" Will his newfound green zest put this issue to rest and settle for good which critter is best? Or are those that feel blessed destined for stress and detest this fun quest that will leave them depressed? It's a Friday of freakdom and we all can't sit still so come one and come all as we romp through the 'Ville!

Last night while the critters were Amtrakin' to Bah-ston, the cattle car was hoppin' with jazzy excitement. Hoofy was holding court with his cronies tellin' war stories of his bloody bear victory. "You shoulda seen the toast!" he said as Daisy rolled her eyes, "it went well with the ursine pancakes I served up all session!" The assembled crowd had a loud laugh as a certain bear seethed quietly in the corner. He knew he had lost the battle--and deep down, he feared that the casualties of the war might be considerable.

Boo gave me a look and I motioned for him to come sit by my side. "Dude," he began, " I haven't taken a beating like this since I put a banana down my pants and turned a monkey loose!" While I personally managed to sidestep the group hug, I knew exactly how the young fella felt. There are few things in this business that feel worse than losing money. One of them is watching everyone celebrate as you lick your wounds. It's...very humbling.

"It was a tricky week," I offered in a transparent attempt of consolation, "and to be fair, psychology is the only intangible of our four primary metrics." He looked up at me with soulful eyes. "Elmer took the hill on Tuesday, implied that rates would have to rise and stocks were sold like they had the fever, Pa. He basically said the same on Wednesday but dressed it up with kid gloves and softer language. The bears grasped the inferred policy shift and pressed their bets through key technical levels. Snapper zigged, Hoofy zagged and the next thing you know there was upside anarchy."

Boo pensively stared out the window and I wasn't sure if anything I said had registered. He knew that Microsoft (MSFT:NASD) reported blow out numbers after the closing bell and Friday was likely to be equally freaky. I weighed whether to continue but knew that I would be doing him a disservice if I wasn't forthright in my communication. I flagged the purser, ordered two bloodies and shifted my weight to face my furry friend.

"Listen cookie," I began, "you know that I share your concerns." His eyes rose and stared deeply into mine. "But the truth is that momentum, by definition, builds on itself. It's nonsensical, this whole idea of buying up (or selling down), but you always want to understand the mindset of your counter-party. The bulls are convinced that, at the very least, we're "circled" until the election. There's even those out there screaming on their soap box that we're in a ten year boom. You and I both know that's uber-unlikely (if not downright dangerous) but there's a camp that truly believes earnings offered upside validation and rates, while they may edge higher, remain at historically benign levels."

Boo sipped on his drink as he watched Hoofy and Daisy publicly grope one another. I could almost see the steam seeping out of his ears as he collected his thoughts. "Doesn't it bother anyone that volatility levels are indicative of financial nirvana? That, regardless of earnings, the average tech stock trades at nose bleed levels? That sentiment levels are off the charts and everyone thinks we're safe through the election? I'm tellin' ya Toddo, by the time this is all over, Greenspan, Bernanke and Raines will be the next generation of scapegoats. It would be funny if only our kids didn't have to pick up the tab."

I agreed in lockstep but decided to play devil's advocate as it was, after all, a fairly long ride. "I know you read Professor Reynolds and he's been pretty sharp on both sides of the tape." Boo knew I was right. "He's eyeing the coming (corporate bond) issuance and is using that tell to see if we're swell. As it stands, he's of the opinion that a disconnect exists between what (corporate) spreads are inferring vs. the "leanings" of the stock market. My only point, Boo, is that you need to respect what others believe to be. After all, perception is reality and the only difference between being wrong and being early is the whether you're there to collect."

"Do you really think that they're gonna rip the schvitz outa them on Friday?" His tone was hopeful and that worried me a little. "There's certainly a chance of a pop and drop, particularly in front of a weekend," I began, "and we know from our technical studies that monster resistance rests above". Boo seemed intrigued. "But," I cautioned, "the bulls are feeling their oats and they'll be looking to take out NASDAQ 2080 (reverse dandruff) and/or S&P 1160. That'll really shake things up and could be the orgasm we need to put in a top."

Boo cringed at the thought of a blow-off and turned his attention back to the passing trees and setting sun. I took a quick look around to make sure all of my critters were accounted for and then quietly removed my shoes and cracked open a Sports Illustrated. I knew that it prolly wasn't the best time to be travelin' on business but I've also learned that the market will be there when I return. And if we've learned nothing else, it's that our journey is more important than the destination.

Good luck today.


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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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