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Whirling Dervish!




The wheel is turning and you can't slow down
You can't let go and you can't hold on
You can't go back and you can't stand still
If the thunder don't get you then the lightning will

(Grateful Dead)

Elmer arrives on the hill with some verve as the bovine collectively look for their nerve. They've been quietly driving the tape for the day and holding their breath that the bid won't give way. The knee jerk smirk has given some zest to the dollar (testing DXY 88), pressured fixed income (down a full point) and, not coincidently, buoyed the equity side of the equation. It's more fragile than frisky, mind you, but Hoofy knows better than to bemoan a profit.

As we've been bantering on the Buzz, the light volume nature of the lift, non-confirmation by the NYSE internals and draggy money center banks are the flies in today's ointment. That's not to say that they can't ketchup, but it's been the story all day and left some doubt in the minxy fray. Perhaps that's what the bulls need if we're to begin the "denial" portion of a short-term trading phase. That...and the flush that never was.

The bullish interpretation is that the NDX held its trendline (higher high) from the March low and the S's held the 200-day. And while this bounce may be a simple case of collective reflexes, the tight credit spreads, twisty stochastics and conditioned dip shtick warrant respect from Red Dye. My best guess--and that's all I got at the moment--is that Snapper has the pep in his step to get to our double secret inflection points (BKX 96/XBD 120). From there, Mon Frere, it's every critter for himself.

The overnight fright is massive--earnings out the yin yang--and the next few days will feature digestion from the gorillas in our midst. Portfolio managers will dissect Elmer's text and base their mammoth decisions on that interpretation. Much like a FOMC meeting, the immediate gratification is a function of the hedgie hot potato but the meat on the bone will shake out over a few sessions.

I've gotta jump and juggle. I sincerely hope that you're having a profitable day and that your evening yields even higher returns.


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