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Fight or Flight?

By

Smooth Operator!

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I close my eyes
Only for a moment, and the moment's gone
All my dreams
pass before my eyes, a curiosity

(Kansas)

Good morning and welcome back to the scorning. After shruggin their way through a rather large Hump, the critters are ready for subsequent bumps. They brushed off Intel and laughed at Yahoo!, another fine show by the bovine review. "I can't fight the tape," said Boo through the tears, feeling as if he's been here for years, "with vols where they are, you'd think we'd see fear but all I can hear are Matador cheers!" Can they run 'em more for a rally hardcore or will Boo and his crew dig in deep for a war? We'll know soon enough as we ready to chill with critters gone wild in Minyanville.

It's hard to argue with Hoofy's heroes after they've flexed and impressed and withstood the test. One of the first lessons you learn in trading is that tapes that down go down (up) and bad (good) news is a sign of a strong (heavy) tape. With the conditional elements in place (lopsided leans, hat size volatility, geopolitical angst), the ursine have had ample chance to spoil the party but, thus far, they haven't found their way past the red velvet rope.

With regard to "pure eyes," the clues emerged yesterday from the opening gate. Breadth, despite the fright, opened (only) 3:2 negative and quickly fought back to a more balanced posture. The semicaps, sold in sympathy with the Mother Chip, immediately found a bid and flipped the switch to Matador City (closing up multiple percents across the board). And, with a handful of fugly situations aside, the rest of the tape was only too happy to toss on a hat and join the party.

We enter the Thursday fray with Hoofy on a high and Boo feeling fried. I was talking with Succo last night and, as we're apt to do, we discussed the dynamic, the lack of investment alternatives and the return of earily familiar psychology. I told him that my pure eyes "see" higher prices but a nagging sense of reality tempers my enthusiasm in the city of critters. Therein lies the balance that I consistently strive for when scribing vibes each and every day.

With the major indices breaking out to new highs in several time horizons, we must continue to respect that further upside may follow. At the same time, and regardless of which way you choose to play, please understand that the risk in the tape is significantly higher than the traditional gauges would imply. That's why my active risk is defined (both ways) and the only religion from 9:30 to 4pm EST is one of discipline

I'm running a bit behind so please lemme hop and jump to the Buzz.

Good luck today.


R.P.

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