The Sucker Pucker
I'm gonna git you sucka!
Good morning and welcome to the nonstop lollipop. With the August Elmerfest out of the way, the bulls kept tickin' and gave Boo a slick lickin'. While the bovine opine we've begun a new climb, the ursine still think that we're bound to sink. Which camp will emerge as the new trading champ? We'll know soon enough and it's gonna be tough, so kick off your shoes and lets look for clues!
As the dog days of summer are officially upon us, the whisper thin tape shouldn't come as a surprise. That's added spice to our daily dance as the ursine mumble and the bovine prance. To be sure, there are gorillas in our midst who feed on reactive waif-like markets. If they can bully the Minx through technical confirmation, they'll look to create a self-fulfilling shilling.
Yesterday's late day Snapper was a function of what was and what wasn't. The financials were firm all day and, as they remain the most important sector in all the land, that must be respected. The banks did poke through their 50-day moving average (BKX 880) and that fact got loud as the closing bell tolled. Furthermore, the tape didn't break after Elmer's announcement and, as such, the guessy pressers got hugged into the bell. The combination of technical winks and ursine blinks were more than enough to squeeze the tape higher on one of the thinnest sessions of the year
While the late day lift was an upside gift, the Minx failed to decisively surmount the broader 50-day moving averages (S&P 989/NDX 1242). If the bulls can put on a brave face and overcome that Hump Day grump, the collective focus will shift to the downtrend lines from July (to see if we're able to break the string of lower highs). If (big if) they can do that, S&P 1000, S&P 1010 (triple top breakout) and S&P 1020 (triple top breakout/new high) will be the gorilla monsoon.
My broader thoughts remain the same and I've got no doubt this will end in pain. As it stands, however, there are powerful agendas in play and the near-term picture isn't as clear. After two months of sideways action and nascent signs of economic traction, the powers that be know we're at a critical juncture. This is the most widely discussed trading range in recent history and everybody is watching. In a thin, reactive market, you've gotta be conscious of the downside while respectful of the upside--even if you don't agree with it.
While optimism abounds (Investor's Intelligence reports bulls at 52 (vs. 51.5) and bears at 19 (vs. 20.8), I'll ask you to keep a script of the last few years handy. To borrow a quote from Cisco CEO John Chambers, "For the first time in a long time, we are seeing a number of potentially positive signs of economic recovery, business improvements, and CEO confidence...having said that, all of us should be quick to remember that there were a number of projections in 2001 and 2002 that indicated stronger second-half recoveries, which for a variety of reasons did not develop."
Good luck today.
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