By Todd Harrison Aug 12, 2004 3:17 pm
May peace be with you!
"You kids keep your noses clean you understand? You'll be hearing from me if you don't. We ain't gonna stand for any weirdness out here."
-Officer Dorf, Friday the 13th
The afternoon fray is starting to stray as the critters dig deep for something to say. The fact that tomorrow is Friday the 13th isn't lost on them although there's little historical precedence for outsized spookiness. Still, between the high profile blows, Dell (DELL:NASD) tonight, the PPI tomorrow and the prospect of a slow summer Friday in front of the Olympics, traders seem reticent to bet on the bovine. Can you blame 'em?
Despite the fright, the sell-off has been relatively orderly and that doesn't bode well for Hoofy. I know what you're saying--the SOX is off 25% since July 1st--how can that possibly be orderly? The answer is that the semis have been sloppy and they're the closest sector in terms of capitulatory action. Unfortunately, the rest of the market has grinded lower, the VXO (volatility index) is still a teenager and money is rotating instead of outright ejection. That's not the stuff of durable bottoms.
The increasingly fragile branch on the side of the cliff--the same branch that was partially predicated on the ability of the tape to absorb bad news--is pinning its roots on credit spreads (still tight), stochastics (buy territory) and S&P 1050 (support below). Moreover, the bulls keep eyeing the rude crude with hopes that it takes one of those 5% baths and catches the energy crunch bears without a catalyst. That's a dangerous game although they'll prolly get their trade when it finally happens.
Other than that, it's more of the same as we edge our way through another day's game. These are dicey times in the market and it'll drain the energy right out of you if you let it. Try and be good to yourself--whether that means hittin' the gym or hangin' with friends or spoonin' with that special someone. Balance is a huge element to lucid and well thought out decisions and sometimes it takes getting away gain that perspective.
Fare ye well into the bell.
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