Keep in mind that contra-hour is about to end!
Fools rush in
Where wise men never go
But wise men never fall in love
So how are they to know
The afternoon Minx has started to blink as the charts all teeter on the brink. To be sure, the pure technicians gotta be wiping their brow by now. Citigroup (C:NYSE) is testing $45 (support since September), the brokers have peeked through XBD 120 (dandruff), the NDX is trading below triple-lindy support and--yowza--the S&P has once again set her sights on the 200-day (S&P 1100). Scary Mary!
We touched on a number of issues during the morning missive and I wanted to circle back in the vein of metric assimilation. The fundamentals are being called into question (conventional expectations were somewhere between "good" and "fabu."). The dynamic duo in Washington has added an element of uncertainty to the electoral mix (psychology). The technicals, as we just mentioned, are being put through the smell test. All that remains is the structural metric and, not surprisingly, that'll likely tell the tale and flip the scale.
Hoofy is hanging his hat on some increasingly constructive stochastics and credit spreads that have yet to sweat. There are also a ton of companies yet to bat and the crowd has started to cheer the other way. Keep that in perspective please--the bandwagon hedgies are flummoxed and flippin' lids as the tape skids--but from a broader perspective, the complacency and confidence are palpable (and potentially destructive).
The currency and fixed income markets have been snoozin' today but the metals have been high and mighty. Both gold and silver have broken out above last week's high and the combination of a dollar break (DXY 88) and increased terror tension has made them a vehicle of choice. I'm a believer in this complex longer term but the near-term nuances are tough to game and potentially toxic if caught the wrong way. Stick with what you know--and no matter what you trade, please be sure to define your risk whenever possible.
I've got a 3:00 conference call so please let me hop and get ready to rumble. Please note that there are alotta skeletal crews on the Street (holiday) and, as such, liquidity may get a touch tight. Good luck into the bell, my friends, and trade with confidence if you're tossing risk around. The easiest way to lose money is if you're standing on your heels.
May peace be with you.
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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