By Todd Harrison Jun 24, 2004 3:08 pm
May peace be with you!
I ran down to the levee
But the Devil caught me there
He took my twenty dollar bill
And he vanished in the air
The afternoon tape has started to scrape as the bulls all chew on some sour red grapes. While they surely have a tart taste in their mouth, I reminded Hoofy that contra-hour earned its reputation as a head-fake haven. I can't tell you whether today's trade will follow that script but a tight and disciplined approach will allow for every possible permutation. Moreover, if we adhere to the notion that an investment should never be a trade gone awry, we'll be covered either way.
With the massive catalysts dancing on the horizon, psychology will likely dictate the price action as we trudge ahead. We walked through possible scenarios this morning and, as we remain largely unchanged from those levels, they both remain viable. We're "right there" on the BKX, S&P, NDX and a number of other important sub-sectors. We must balance the "obvious" acne with the fact that everyone sees it (and few shorts remain).
The gold star of the day has to go to the metals (pun intended) as they rip roared higher. Gold, through $400, and silver, up 5%, are likely benefiting from a four pronged play: Technicals (although silver still has a hump to mount), safety (in front of unknown geopolitical evolvements), liquidity (Carrie) and a soft dollar. While a laggy greenback remains my longer term "metals will outperform" thesis, I sense that today's move is a function of the first three. I'm not a metal analyst--Fleck and Laurie know these commodities much better than I do--but that's my honest read.
We've got a bevy of Beeks tomorrow and then traders will likely shift their attention to pre-weekend posturing. With NATO on the horizon, there are some safety concerns and that may be helping to firm volatility levels. On an absolute basis, however, we haven't seen complacency like this since 1996. How long ago was that? I was still tossing around exposure for mother Morgan and taking the other side of customer order flow. Oofa!
I'm gonna hop to the Buzz and ride out the rest of today's wave. The day wouldn't be complete without putting the Minyan Mountainfest in front of you as it's hard for me to contain my enthusiasm. The worst case scenario for this trade is that we're all in Crested Butte, feeling the educational vibe, tossing some thoughts around, building our network and maybe--just maybe--chasing a gaggle of geese. That's an attractive risk/reward from where I stand and I, for one, am looking forward to it!
Fare ye well into the bell.
position in silver
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