The Critter Journey
By Todd Harrison Jun 23, 2004 8:37 am
I've got a triple secret surprise for you Toddo!
Lying beside you, here in the dark
Feeling your heart beat with mind
Softly you whisper, you're so sincere
How could our love be so blind
Good morning and welcome back to the critter shack. Hoofy awoke in the Minyanville Zoo and reached for his bottle of upside shampoo. "Reverse dandruff charts are up to my ears," he mused as he spoke to his Matador peers , "If we can now climb that tall wall of fears, the Red Dye supply will scream NO MORE TEARS!" Will the bovine step up and claim the green prize or slip on the soap for a nasty surprise? It's Wednesday, my friends, so don't be a grump 'cause we'll soon find ourselves to the right of the Hump!
The genesis for the dandruff discussions originated last night when I was having a spirited debate on the metals. I've been in the "longer term relative outperformance" camp for some time but tempered my enthusiasm (last month) when Carrie appeared to be "in a mood." The disconnect between the two perspectives is simple. As an investor, it's intuitive that these commodities will benefit from the inevitable dollar devaluation and an eventual safety play. As a trader, however, I sense that the near-term performance is tied directly to the structural metric.
These commodities aren't alone. In fact, a quick sniff across the trading cliff finds textbook reverse dandruff forming on the S&P, NDX, INDU and, quite possibly, the BKX. If--gigantic if--Hoofy is able to put some wood on the ball (and confirm these patterns), it'll bode well for the technicians in our midst. While that may be the validation the fence sitters need to break out of our recent range, it's important to recognize that our current jucture isn't about the technical metric or, for that matter, the fundamental inputs. The fate of the tape is a function of the relative liquidity and that'll drive psychology, enable the technicals and validate earnings (either way).
We all weigh the inputs to our minxy metric brew differently as a function of our relative approach. I'll be watching our dandruff levels (Gold $400, S&P 1150ish, NDX 1510ish, BKX 98.5ish), absorbing the fundies with a grain of salt (rear-view and decelerating), eyeing my liquidity proxies (asset class correlation) and balancing the potential for stored energy (momentum) vs. the blatant complacency that remains in place. And just for schnitz and giggles, we'll also get the triple edged sword of quarter-end, Elmer's bend and the Iraqi mend.
That's about it from my perch as we ready anew to dabble in the muck. It's been a bit crazy of late in the city of critters but I assure you that it's for the benefit of ye faithful. We continue to attract fantastic talent to our roster of professors (more to come!), the Mountain retreat is shaping up nicely, the foundation is almost set for the Critter's Choice Awards and our mission of financial literacy and children's education evolves daily. None of this would be possible without a loyal Minyanship so please let me take the time to thank all of you for all you do.
Good luck today.
No positions in stocks mentioned.
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