Dippers and Gippers
Remember Minyans--the first half hour of trading is always noisy.
You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness. If we fail, at least let our children and our children's children say of us we justified our brief moment here. We did all that could be done.
Ronald Reagan (1911 - 2004)
Good morning and welcome back to the Gipper Shack. Last week's possession was devoid of impression in spite of the fright of minxy obsession. In the face of a race to Red Dye Junction, the ursine continued a collective dysfunction. "I've pulled from my head a ton of brown hairs," said Boo to his crew of frustrated bears, "but the bulls found answers to all of their prayers and continue this game of musical chairs!" Will the new string of days lift this foggy bear haze or will Hoofy's stealth craze win him back further praise? We'll know soon enough as we ready our skills and prepare one and all for a romp through the 'Ville!
There's no shortage of strong willed opinions as we edge our way through the June moon. We all know that the last day of this summer month will usher in two much anticipated catalysts--the faux handoff in Iraq and the all-but-given hike up Elmer Mountain. What remains to be seen is if the "was that really it?" correction was a necessary precursor to a collective shrug or an ominous warning from Carrie and her rambunctious friends. One thing for certain--with the charts edging closer to inflection points and a reactive psychology in vogue, one of our critters is bound to be bitter.
From a purely technical perspective, a few signs will litter this week's roadway. Crude, despite its pop and drop, has nestled back towards current support (and previous resistance) at $38/brl. The minxy mindset yawned the last time oil spoiled, but a continued jig will certainly manifest itself in the bottom lines of consumers and corporations alike. Think about it--if you're feeling the effects in your Honda Civic, imagine how a global corporation must cope with additional margin pressures on top of an already fragile global recovery.
With regard to our stateside equities, we've been eyeing several key levels that should help push the fence sitters off their perch. There are the downtrend lines in the three sisters that, as a whole, keep Boo coming back to work each day. And then there are our two lead sector tells, both of which are facing a decision of their own. The semis had every excuse in the world to rip higher on Friday--particularly with the hedgies caught the wrong way--but couldn't muster the gusto to push past the previous day's opening (and now face a downside gap immediately below SOX 470). And while the little piggies may wanna go to the market, BKX 98 looms as formidable resistance just as their big toe Citigroup (C:NYSE) eyes its 200-day ($47.98). (Note: also keep half an eye on the trannies as they retest TRAN 3000).
There are few known catalysts to help shape the tape this week. The Fed's Gramlich speaks today while Texas Instruments (TXN:NYSE)offers up a mid-quarter update. Elmer will host a central banker piñata party on Tuesday (and then give his acceptance speech at the reconfirmation hearing on Thursday). Xilinx (XLNX:NASD) offers mid-quarter guidance on Wednesday, a slew of conferences litter the landscape and, last but certainly not least, Monsieur Beeks will deliver the "uncorrupted" PPI and Wolverine confidence on Friday (if the market is open).
We power up this Monday pup to find Asia on fire (+2.5%), Europe playin' a muted tagalong, the dollar index is testing fresh two month lows and the metals are trying to grasp for traction (after last week's lethargy). Our stateside futes, for their part, are giggly green but it remains to be seen if the ever-elusive volume qualifies this latest lift or once again acts as the intimacy issue du jour. And please take a peek at the Iron Horse this morning--it's required reading for anyone who wants to understand the minxy mechanism.
Good luck today.
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