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The Alabama Slammer

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Anybody wanna make a bet that the tape doesn't end at these levels?

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Thirty two teeth in a jawbone
Alabama cryin for none
Before I have to hit him
I hope he's got the sense to run

(Grateful Dead)


It's another day in the Minyan fray as ticks flicker and the muses play. Fokker, who's been invited to tonight's mini-Minyanfest, has been dutifully scanning the screens in search of actionable ideas. What's he looking for? Extended names that are in the latter stages of a blow off type move. Once he fields 'em and tosses 'em over, I'm pricing out put spreads that can (potentially) set up for marginal exposure.

Ole you say? Perhaps. As Tony is quick to point out, the "charts" don't support an aggressive stance on the short side. The other side of that coin is what we've been weighing in our crowded keppes: Don't the technicians HAVE to give the tape a final and definitive stamp of approval before a reversing course? That would be consistent with a path of maximum frustration and par for the Minxy course.

If this is, indeed, the final stage of the "denial, migration, panic" pattern, you must weigh the potential for further jig vs. the possibility of lower prices with which to trade. There's no guarantees in this business, only calculated probabilities, and an assimilation of our trading metrics is decidedly mixed. The fundies don't warrant this move, the technicals (while extended) are constructive, psychology is manic (which is bullish until it's bearish) and the structural metric is "OK." In other words, the musical chairs may continue but keeping one cheek on the seat isn't a bad idea.

For the more active Minyans among you, DJIA 9000, S&P 980 and NDX 1210 have been areas of support today and those are the zones to monitor. If they hold these levels towards the close, the path of least resistance is clearly higher. If they start to fail, a la Monday, it'll give traders food for thought as we edge towards the pending catalysts. Good luck as you find you way and just remember, you're a Mellon!

Finally, please understand that the Minyanship is a diversified bunch and, as such, there's likely to be content that's either too advanced or too "simple." We do our best to balance and address both sides of the spectrum while furthering the educational and philanthropic nature of our efforts. We started Minyanville and The Ruby Peck Foundation for Children's Education to make a difference. With your help, we're edging closer to that goal every day.

Fare ye well.

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