And Away We Go...
Weekend? What weekend?
Good morning and welcome back to the flicks and flack. With last week's crimson fresh in our mind, we ready ourselves for the new minxy grind. "We're halfway through the earnings parade," said Hoofy the bull as he looked up and prayed, "with lots of data left to be weighed and plenty of time to stop this cascade." Can the bulls pull together and jump start this beast, or have Boo and his crew just started to feast? It's a spankin' new week for the 'ol minxy freak, so let's pull it together and see what we think!
There's nothing like a little suspense to start the week, and that was provided courtesy of Friday's sloppy close. With the S&P danglin' near the 200-day moving average and the NDX sitting on the trendline from the March low, the critters had plenty to think about over the weekend. The dynamic has changed--at least for the time being--and the burden of proof has been lobbed right back to Matador City. This tetherball tape has been the hallmark of 2004, and it's now time for the bulls to dig in their heels and make a strong stand.
It's apropos, I suppose, that Elmer will take a step forward tomorrow and address the muddled masses. The pied piper of the "What, me worry?" crowd has been navigating our cruise ship through a tenuous canal for many years. Whether or not he's left any room for maneuvering remains to be seen as he's already chewed through historic stimuli and charmed the mindset of the masses. Indeed, one only needs to read the continued Fed ramblings to see that there is no inflation, healthy growth and a horizon that will soon host a beautiful sunset.
The real world, of course, is entirely more problematic. With volatility indices near decade lows, sentiment levels lofty, the rate backdrop rising, earnings decelerating and crude accelerating, Hoofy has his work cut out for him. Further, with the political infighting and geopolitical outfighting dominating the summer months, the collective psychology has become a fragile balance between what is and what we hope will be. If this is, in fact, a consolidation within a larger uptrend, the newfound angst is par for the course. If, on the other paw, the mounting evidence of a trading top sways the trading jury, we're still in the beginning stages of denial.
The bovine will hang their hat on the constructive credit spreads, and some stealth dandruff (if we can hold S&P 1090). They're also hoping that the next spate of earnings will paint a rosier picture of what's to come. There are rumblings in the hedge fund community of a significant June slowdown (retail, industrial production) and a steady stream of upbeat agendas could help quell that spell. The earnings line-up is meaty--now they've just gotta get on base.
We power up this Monday pup to find a snoozin' Asia, pink (slightly red) Europe, mixed metals and a dollar that just can't seem to push through DXY 88. The data is spittin' up as we speak and, as always, we're up to our elbows in newfound information. Play smart, trade tight and define your risk if at all possible. This is Weed Out City, Minyans, and we very much want you to make the cut.
Good luck today.
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 firstname.lastname@example.org.
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