Remember Minyans, there is overnight gap risk as function of Mr. Beeks!
I can tell your future
Look what's in your hand
But I can't stop for nothing
I'm just playing in the band
The afternoon cruise continues to bruise as the once brazen bulls are paying their dues. The drapes have been crimson from the word "go" and while there have been pockets of optimism, the flow has been mostly downhill. And while equities are the collective focus, there is Art Carnage in the metals markets and they've smelt up the joint. The beginning of the end...or a simple dance within a well defined range? Let's take a peek and sniff this freak!
We've now been in this range since the very beginning of April and it's frustrated the beans out of alotta traders. Each time the Minx races higher, it feels as if acne will break out in Matador City. Every time we fail, it smells like Boo will finally get to dance his much awaited jig. The reality is that until proven otherwise, we're just listenin' to the music and playing in the band.
While I've been pretty grizzly for a while and view this past rally as an unsustainable attempt to reflate a flat tire, I actually nibbled on some defined risk upsides recently. The irony isn't lost on me as we drip and dip and I can't help but look up and smile at the powers that be. My thinking was (is) that the repeated tests of the top of the channel would provide a final capitulation and allow for a) a quick upside shnitz and b) a better entry point for Boo. And while there are PLENTY of (well-documented) reasons for a massive trap door, anecdotal evidence (corp spreads) feather Hoofy's cap as well.
With that said (and while I still have those cheap and cheaper calls), I'm certainly not gonna make any stands. The reality is that if (huge if) the "carry trade" (that we've watched inflate asset classes across the board) starts to get unwound, there will be blood on the streets. That is also my chief concern regarding the metals and must be factored into any decision making process. For if the liquidity spigot dries up, the only fluid on the Street will be a collective teardrop.
Q-logic (QLGC:NASD), Advanced Fiber (AFCI:NASD), Symantec (SYMC:NASD), Time Warner (TWX:NYSE), LSI Logic (LSI:NYSE) and JDS Uniphase (JDSU:NASD) highlight tonight's parade while Exxon Mobil (XOM:NYSE), Aetna (AET:NYSE), Georgia Peach (GP:NYSE), Gillette (G:NYSE) and Union Pac (UNP:NYSE) lead the morning rush. We'll also get the much awaited GDP report from Mr. Beeks (exp. 5%) along with a bevy of other economic indicators. It "seems" as if bonds are due for a smart bounce but, as we know, momentum sometimes carries us farther than we think.
I've been balancing some stuff on my end that has nothing to do with the tape so thanks kindly for understanding. I absolutely love writing and have devoted myself to the Minyan cause but there are certainly days that are easier than others. I know that the critters are a nutritious part of any balanced trading diet so I try to keep 'em out there and active. Still, and as I'll always be forthright with ye faithful, I wanted to share the snare.
Good luck into the closing bell.
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 firstname.lastname@example.org.
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