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Hump Day at Ollie's


Cottage Cheese?


Good morning and welcome back to the Hump Day track. June has arrived so you better make way as the critters are here and they've something to say. They gathered at Ollie's, their choice for some chow, the bull and the bear, the snake and the cow. They chewed as they talked and laughed while they ate, discussing the Minx and the fate that await. The conversation went a bit like this:

Boo: I've officially conceded the month of May to the Matador Crowd. Nice showing, gutsy performance and point taken. Now, let's take a fresh stab at reality and a lucid look at the tape. The three sisters are still down for the year, the tape is flush with hope and ripe with complacency, this "counter-trend" rally is getting long in the tooth (in the short-term and in the bigger picture), the yield curve is flattish (and lending to a relative underperformance of the all-important financials) and we've got the mother of all blackballs coming tomorrow. Hey now, let's buy 'em!

Hoofy: (sporting a smug grin) What we have here is a failure to communicate. The financial mechanism boils down to two very simple dynamics. Supply vs. demand and perception vs. reality. Rates remain historically low, the Fed has said they would do whatever it takes to provide a crutch and there are precious few alternatives to equities. Toss in a bubble of hedge funds paranoid about underperforming and you've got a recipe for a long squeeze higher. It's happened over and over and over again and this time will be no different.

Sammy: (slithering over to the Boo) You've gotta admit that the equities have had every excuse to trade lower and they laughed in the face of supply. I don't disagree that there are plenty of potholes in the financial fabric (and ample cause for a more serious pause) but you gotta make hay when the sun shines. That doesn't mean "go with the flow" and abandon your discipline-quite the contrary-it simply means that opportunities still exist for those willing to dig it out and do the work.
Daisy: What about money making ideas? The vernacular and "process" only means so much without a practical application and proper directive.

Sammy: This is true, Dairy Diva, but the task at hand-and the risk at a blanket approach-is that there are different strokes for different folks. There are a multitude of Minyans and each one has unique needs and a distinct risk profile. That's why the content proposition is so diverse and the honchos at MVHQ continue to add lenses with which to view the flickering ticks. Along those lines, you guys may wanna keep an eye out for Pepe Depew as he makes his renewed debut. The discipline of point and figure work-as mastered by the team at Dorsey Wright & Associates-is an integral aspect of the daily dance. I think you'll find his insight to be tremendous value added.

Daisy: Is he gonna be in Ojai in August?

Boo: Yeah, he'll be there. Santoli will be there. Saut will be there. Shobin will be there. Most of the Minyan professorship will be there. And while the content promises to be eye opening, the true value of Minyanville is in the community. That's the network we're gonna tap and if it's anything like last year-where relationships were forged, accounts were found and foundations were laid-well, that's worth the price of admission right there.

Hoofy: Wow, you sound like a salesman! Let's just focus on the task at hand, shall we? What do we see for today?

Boo: I made a stand yesterday at NDX 1550 which, while cute, is serving as the most defined risk in my short-side universe. I'm also noodling the notion that some of the demand was month-end related which, if true, dissipated into the close. Perhaps that's why we saw Smith Barney and Mother Morgan dump 4000 Spooz after the (sell-side) imbalances were announced.

Sammy: You may be right, Boo, but you must also appreciate that we're still in the midst of a holiday-thinned, skeletal-staffed week. That's why our daily tea leaves are so very important. The ducks won't always line up but, when they do, they offer helpful hints in the daily dance. That's why Toddo always talks about the market internals, the action in the financials, the sector rotations and the abundance of levels. Somewhere in there, nestled amongst the noise, is an advantageous risk reward.

The critters sat back and admired their empty plates, quite conscious that the Minyanville Weight Debate was quickly approaching. They knew that the game was getting tougher and the stakes were getting higher but they also knew that we'd figure it out together. That's the value of community and, above all else, that's why these five frisky critters cohabitate your computer screens.

Good luck today.


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