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While You Were Sleeping

By

So much for the slither!

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I tell myself
Hey only fools rush in
And only time will tell
If we stand the test of time

(Van Halen)


Good morning and welcome to the spawning. After months and bumps while patiently waiting, the critters can finally stop their debating. "We have earnings and Elmer and hand-offs and more," said Hoofy the bull as he readied for war "and if that's not enough to break free from this snore, the end of Q2 will spark trading galore!" Will the next coupla days offer clues for the cruise and excite while igniting this new minxy fuse? Or will traders just wander, confused by the news, and end this tough quarter singing the blues? There's no time to wait so come one and come all as we ready ourselves for a climb up the wall!

It's been a frustrating six months in the trenches as we've watched the Minx meander in a slippery sideways slither. After a number of jump starts and plenty of false hope, we now arrive at a juncture that traders hope will define a trend heading into the back nine. We know where the critters stand--Hoofy is thisclose to acne across the board and Boo is clinging to lower highs and widespread complacency--and they'll both be paying close attention to the bevy of banter due this week. Indeed, if the recent calm is a precursor of what's to come, we better hold onto our hats as we ready for the perfect storm that surely awaits.

A premature evacuation greeted traders this morning as the Iraqi hand-off took place while we were sleeping. It was a shrewd move by the powers that be aimed at cutting terror off at the pass. It also served to spike global markets and giddy up our pre-market pup as a looming unknown was removed from our view (despite the fact that this was, in many ways, a matter of semantics). Fear not, ye faithful, as plenty of catalysts continue to litter the trading radar and will pepper our step the entire week.

We enter this stretch with some two-sided situations to chew on. Earnings are expected to be "fine" but they'll surely decelerate as rates, however measured, edge higher. Technicals look poised to break out and confirm the reverse dandruff but sentiment indicators litter that path with potential trap doors. And the liquidity spigots continue to spurt (as a function of the electoral agenda) despite the seemingly sparse stimuli left in Elmer's back pocket. In short, there will be plenty of reasons to assign to the rhyme regardless of which way the next few percent unfold.

We know that the first rate hike historically leads to shruggin' and huggin' (higher) and that may play into the mindset of the masses. We also must also appreciate the fact that folks are confused and will remain reactive into quarter-end. That type of thinking could very well lead to the vaunted "pop and drop" if the white flags start flying out of Red Dye Junction. Active Minyans will want to pay particular attention to the action in the financials (BKX 98ish), the smell of the breadth and the qualifier that is volume.

We sizzle up our systems to find green equity seas, continued jig in the metals (watch gold $400 as support and silver $6.20 as resistance), the dollar giving some greenback, crude screwed and a bullish 'tude. The first half hour promises to be noisy--as does the entire week--so I encourage you to map out a strategy and define your two-sided risk whenever possible. And if you haven't read the Iron Horse and his road map to the gauntlet, please do so--it could very well help you make better and more informed decisions for yourself.

Good luck today.

R.P

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position in silver

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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