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The Rug and Tug

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Technical analysis is a good tool regardless of your costume!

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Oh no, I will not lie down
Turn this thing around
I will not go quietly, I will not lie down
I will not go quietly, I will not lie down


(Don Henley)

Good morning and welcome back to giggly wiggle. Yesterday's grindy bind was flying blind until Senor Snapper stopped by for his quick shtick. It wasn't the jazziest of tortoise turns but it served notice to the ursine uglies: The bovine will not go quietly. Indeed, aided by the bubblicious internets and saucy SOX, they clawed their way through the alligator fray and closed the screen green. Will today pave the way for further ursine pain or can Hoofy maintain his awesome yearly gains? It's a new day in the city of critters so settle in, simmer down and let's get busy, baby!

There are four time frames (Cycles, Phases, Trends & Nuances) with which to view the Minx. Each dictates a different perspective and, by extension, a unique stylistic approach. I've got tremendous conviction that we're in the early stages of a multi-year bear cycle and can "see" the long term storm clouds (debt & derivatives). However, there can be vicious bull phases nestled in the cycle, trends embedded in those phases (both ways) and nuances scattered among those trends.

I bring this up to illustrate a point as we edge into today's muck. While I maintain my grizzly overview, there are a few technical inflection points in our midst. First, in the Nazz, the four-letter freaks have (thus far) held the trend channel that's been in place since March. That backdrop serves as a backstop for the bulls and is a "fish or cut bait" level in some regards. Within that trend, active Minyans are focused on the reverse dandruff (bullish) that has developed this past last week (confirming above NDX 1270). It's a bit granular, mind you, but as a Minyan, you always want to know what traders are looking at. And now you do.

The S&P is a bit more convoluted. From a trend perspective, the Minx held the 50-day moving average (977) a handful of times and that has emboldened Hoofy. A rigorous defense made plenty of sense the first few go 'rounds, particularly on the heels of a soft tape. However, the 20/30-day crossover dribble (first sell signal since the spring) warrants a mention as does the looming double top at S&P 1015. For the nuance nibblers out there, S&P 990 has been a uber-near term ceiling and if it can push through, there is tranched resistance at S&P 995, S&P a G and, obviously, S&P 1015.

There are numerous issues for this market and they'll offer obvious reasons for the eventual downside rhyme. In an effort to take our journey one step at a time, however, I'll be keying off these levels and augmenting my risk profile accordingly. It feels as if the bulls wanna test the upside mettle this morning, particularly with a push through S&P 990. Stay on your toes, keep an eye out for alligators and, above all else, lighten up Francis.

Good luck today.
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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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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