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Man oh Man!


There will come a point when the dip shtick doesn't stick and discipline will dictate who remains in the game.


One man caught on a barbed wire fence
One man he resist
One man washed on an empty beach.
One man betrayed with a kiss

Good morning and welcome back to the Hump Day track. A new day is here and we're ready to go as the critters prepare for a jazzy new show. Each session is a journey unto itself and, as the minxy mechanism manifests, fresh elements are introduced to the ever-changing financial equation. Last week, we smelled some smoke. This week, we're testing technical support in the face of fugly internals. Through it all, we've gotten an avalanche of earnings that have placated the fence sitters and emboldened the bulls. It's enough to drive a Minyan batty, I'll tell ya, as reactive rationalization abounds and performance anxiety permeates.

To be sure, we can postulate and hypothesize that a fund is in trouble or there's blood in the commodity (copper) streets. The metals certainly trade that way although, as we know, invisible catalysts are pretty difficult to game. Still, in a derivative-laden globally connected economy, we must remain ever-vigilant for signs of smoke lest the theater starts sniffing. That, in a nutshell, is why I watch the piggies like a hungry hawk. They're not only a proxy for all things financial, they're a harbinger of the contagion risk that may or may not eventually unfold.

I opined on yesterday's Buzz that Textbook Technicals 101 dictates a retest of previous acne (breakout support) to be a healthy presage to further gains. As it stands, Hoofy and his bovine brothers have S&P 1295-1300 underfoot and enter today's fray with fresh technical enthusiasm. I respect this take and remain somewhat balanced with my current risk profile. I like my longs, I dig my downside gamma (in the piggies) and understand that equities cannot be viewed in a vacuum (without dollar juxtaposition). This is, in many ways, a large jigsaw puzzle with a few too many pieces. Our goal in the 'Ville is to fit enough pieces together so Minyans can watch the big picture slowly unfold.

I wanna offer one more thought before I flip lids and join my brethren on the Buzz. It seems to me that most everyone I speak with is conditioned to buy dips. I suppose you can't blame them, given the curiously strong underlying bid coming out of the bubble, but it's worthy of a noodle as we ready to trek ahead. There will come a point when the dip shtick doesn't stick and discipline will dictate who remains in the game. I encourage all Minyans to understand their entry and exit strategy, their trades vs. investments, and self-check against hope and emotion. The onus is on us to adapt to the market and understand that change isn't only probable, it's inevitable.

Good luck today.


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