By Todd Harrison Jun 23, 2003 2:42 pm
Good luck into the close and fare ye well!
The problem is all inside your head
She said to me
The answer is easy if you
Take it logically
Let's walk through this one more time. Massive amounts of liquidity were injected into the system, the media tried to convince the public that the only risk was NOT being invested, anxious traders fought through the putrid smell of roasted fur and chased performance, new buyers emerged higher, technical breakouts became self-fulfilling and everyone got on board for the end-of-quarter jam job. Is it any wonder that the Minx sneezed in the suitcase in an attempt to travel the path of maximum frustration?
We've been discussing the potential flies in the ointment for some time. As the Minx shrugged and the bulls hugged, however, the ugly ursines mumbled and stumbled aimlessly. Hoofy and his band of bodacious bovines could do no wrong as long as the tape was strong. Life was good, the bear market was over and all was well in the world. Or so it seemed.
This pullback may very well prove to be a healthy consolidation and a chance to get involved. We're surely approaching "put up or shut up" levels on the charts and if we hold and go, the "I told you so" crowd will beat their chest. While I remain quite concerned about this market, I'm trying remove my big-picture bias and approach the tape as a series of little pictures. That doesn't mean I don't have an opinion, it simply means that each juncture should be judged on it's own merits.
As we discussed before the opening, the reaction to the Biogen (BGEN:Nasdaq) merger was my tell du jour. Just as when bad news being shrugged off is bullish, good news getting sold is equally bearish. We saw signs of that last week when the brokers and select home builders got slammed on "better" earnings. Again, the bulls may very well have something up their sleeve, but please remember that the tea leaves work both ways.
I'm trading (from the short side) with uber-tight stops and balancing the intraday negatives (down all day, southbound leadership) with the trendlines from the March lows (should provide support). As I watch the futures vacillate, my eyes are scanning the main tells. Thus far, the banks, breadth and biotechs show no signs of liftage (with each rally attempt) and that portends lower prices. All of this is juxtaposed against the technical inflection points we've discussed all day. This sideways action will either be viewed (in hindsight) as a basing (before rallying) or a churning (before resuming the downside). Stay tight, stay sharp and stay puff, marshmallow man!
What's the best way to game Elmer? Other than the first move (on the announcement) typically being the false move, I've got no insights to share. When events are this "gamed" and crowded, there's a lotta fluff associated with the actual news. The market will go where it wants to and I doubt 25 paltry basis points will make that much of a difference.
That's about it from my end and I'm gonna flip lids and tickle ticks. I promised Mom that we'd grab some birthday schnitzel so I'm gonna scoot soon after the bell. I'm trying to take my own advice, and that's to enjoy the journey and let the destination take care of itself. For if we get to where we need to be, the ride is already over.
Have a peaceful night.
position in bgen
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