The Boss Toss
Fare ye well into the bell!
Hold on tight stay up all night
`cause Rosie I'm comin' on strong
By the time we meet the morning light
I will hold you in my arms
The afternoon sizzle is starting to fizzle as the crimson begins to slowly drizzle. Hoofy held center court for the better part of the session but a few flies slowly started to emerge. Wal-Mart (WMT:NYSE) and Bank of America (BAC:NYSE) were the initial pink eyes but the Nazz breadth (now flat) and a biotech downside reversal have helped Boo's crew.
We noted on the Buzz that the earlier jig stopped in its tracks directly at the S&P downtrend (from the July high) and upon fillage of the NDX gap (from Friday's lower opening). Those levels, in conjunction with XBD 120, was the intuitive place for the bears to mount a stand, and so they did. We're now left to position ourselves in front of tonight's earnings (Kla-Tencor (KLAC:NASD)) and tomorrow's GDP (exp. 3.7%). We've also got a massive office move on our radar but that's not particularly game-able.
I found myself getting--dare I say-- short-term constructive mid-yesterday after the bears couldn't deliver the knock out punch. There very well may be a bit to go on the upside but please keep in mind that I'm uber-respectful of the trap door potential. The schvitz is gonna hit the fan one of these days and, more likely than not, it'll be after the Minx has conditioned the grizzlies to cover on the first, second or (gasp!) third dip. That dynamic is already in play (see the VXO) so right hands have every right to remain up.
Contra-hour is comin' to a close and it was an interesting juncture today. Nazz breadth gave it up despite continued SOX jig and the NYSE breadth didn't budge (positive) despite slippage in its primary components. I'm not sure what to make of that (a pterodactyl?) but, either way, "hands over eyes" contra-hour rules imply that we may see a lift into the bell. Never advice, of course, just sharing my process with the hopes that it adds to yours.
As always, I hope this finds you well.
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 email@example.com.
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