Freaks and Witches
Good luck Minyans!
If you twist and turn away
If you tear yourself in two again
If I could, yes I would
If I could, I would let it go
Good morning and welcome back to the muddy track. It's been a long week as we grope for a trend and the critters are psyched that we've come to the end. Today's minxy witch will help scratch their stock itch before they flip lids and attitudes switch. "We're up, we're down, we're nowhere fast," said Sammy the snake to the rest of the cast, "but all of that stuff is in the past as we look for the move that's gonna last." Can Hoofy dig deep while the rest of us sleep or will Boo and his crew slaughter all of the sheep? It's freaky, it's Friday, it's sure to fulfill as we ready ourselves for a romp through the 'Ville.
We power up this morning's muck to find geopolitical tensions and political concerns on the front burner. These are sizzlin' topics of discussion and most folks have strong opinions one way or another. For purposes of this discussion, however, we must remove our personal views and weigh the potential impact on the collective sentiment. We remain mired in a sticky war and in the throws of a heated electoral campaign. This could have a profound impact on the financial markets--particularly when juxtaposed against the psychology bubble.
What it'll come down to, in my view, is whether the structural metric can offset the sentiment cracks when they occur. We know that a coordinated agenda exists and it's worthy of our hard earned respect. That's not a conspiracy theory, my friends, it's just what is. Bones jaw each and every day telling us the sky is yellow and the sun is blue. After a while, and when supported by massive liquidity, you start to believe it. The Kool-Aid may not be as sweet as the bubble boom but it still quenches the thirst of the dedicated masses.
As it stands and please don't blink, we continue to meander under multiple resistance zones. The S&P, Dow and Nazz have put in multiple "lower highs," the BKX remains under the breakdown level (BKX 98) and the semis not only failed at the 200-day (again), they failed miserably. With the volume so muted and the action nondescript, it's hard to tell if this is a basing (before a leg higher) or a churning (before a bigger oops). The credit market (spreads) support the former while the technical metric implies the latter.
We enter today's expiration to find an Asian drubbin' (-2%), firm metals and a flat Europe and dollar. For those monitoring the long silver vs. short financials trade, please know that I made 'some' sales of the white lightening as it approached $6 and have rolled up/tightened my stops on the "leaves." I'll likely leg out of the other side of the trade as a function of time and/or price as this was a pure schnitz. As always, we share because we care and not because it's advice.
Good luck today.
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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