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Churners Vs. Basers


Sometimes the best bets are the ones you don't make


Wrapping up our first foray into the five day fray, from where I sit the context is fully positive though the timing remains elusive. Short-term, we're slowly working on resolving some of the extended technical conditions while traders file into their two respective camps; the churners versus the basers. For now, rotation is the name of the game as the evidence of the market narrowing continues to mount.

We've been here before. 1994. 1998. 1999. And don't forget the mass migration from the "New Economy" to the "Old Economy" in 2000-2001. Even so, neither Hoofy nor Boo have the right to be complaining about empty pockets these days. There have been stocks to buy and stocks to sell all year long as we make our way to the absolute mid-point of 2005. That's almost the definition of rotation, especially compared to 2003 (and more than a few lengthy stretches in 2004) when Hoofy was capable of burning Benjamins at will while Boo found quarters as heavy as manhole covers.

At Team Minyanville's Belmont Park fest on Saturday, at one point someone asked me who I was betting on in the race that was about to go off and I said, "no one." The answer was met with some surprise until I pointed out that just like a trader sometimes finds that his best trades were ones that he didn't enter, sometimes the best bets are the ones you never make. Difficult tapes require a more intense focus on selection.

Tomorrow we have a number of pre-market economic numbers coming out as mapped out in Collins' Trading Radar, as well as a number of potential earnings catalysts. Things may seem a bit slow on the surface as we move closer to Summer, but as Jeff Saut pointed out earlier this morning, internally we're at a pretty key juncture. This is one wheel you don't want to fall asleep at.

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