The Pink Panther
By Todd Harrison May 25, 2004 2:56 pm
Fare ye well into the bell!
A soul in tension that's learning to fly
Condition grounded but determined to try
Can't keep my eyes from the circling skies
Tongue-tied and twisted just an earth-bound misfit, I
The afternoon glide is a minxy green ride as the critters all nervously watch for a slide. That's been the pattern--strong openings, valiant attempts and then a wave of selling into the closing bell. Taking a snoop around the coup, this is likely Hoofy's best shot at setting a new standard. The banks are firm (watch BKX 95 as a closing over/under), breadth is 2:1 positive, participation is broad and nervousness abounds (for good reason). The absent variable? Volume--it's been uber-muted all session and that's not what sustainable bases are made of.
The above mentioned elements are daily reads but today's close has technical implications. S&P 1108 and NDX 1140 are levels from which we've previously failed and, dusting off our chartist guide, we know that past support is future resistance. We're painfully aware--if not bored--by the recent range and with everyone watching the same pattern, you can be sure that (buy) stops are set marginally above those levels. Please remember that technicals are but one of the four primary metrics.
The whisper thin week continues tomorrow as Beeks will swing by for breakfast (mortgage apps, durable goods (exp. -.9%, ex-tran -1%) and new home sales (exp.1200k). After that, the technical and psychological metrics will play tennis and reactive traders will whiplash themselves as they follow the action. From a structural standpoint, Professor Reynolds educational analysis has once again come in handy as the credit market pays no mind to the emotional geopolitical crosscurrents (yet). It's been a tremendous read for the equity tape and remains an important part of any balanced approach.
On a macro basis, the dollar breach of the DXY 200-day moving average (yawn) has given the metals some lift and alleviated that monster oversold condition. It gets tougher from here and I am balancing my desire to diversify away from the greenback (into silver) vs. the lurking fear of Carrie and her unbiased bashing. The idea is simple--if (when) the reflation trade unwinds, the asset class morass will be indiscriminate. That is surely the ultimate path of maximum frustration and, as we saw this past month (when we sniffed a whiff of her perfume), the market is not set up to absorb this dynamic.
I'm gonna hop and hobble over to the Buzz as we count down the ticks till thy closing bell tolls. I'm personally psyched to get through the session as I'm grabbing some schnitzel with Ricky Pollack (Joel's brother) for the first time in years. Most traders worth his (or her) salt are rarely satisfied with their performance (it's the nature of the beast). But before you put corks on those forks, I would urge you to spend some time in Joel's world. For no matter how hard your day was, you have a lot to be thankful for.
Have a peaceful night.
position in silver
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