Dire Strait Jacket
When in doubt, sit it out...or trade a little "in between."
Now that ain't workin' that's the way you do it
Lemme tell ya them guys ain't dumb
Maybe get a blister on your little finger
Maybe get a blister on your thumb
Good morning and welcome back to the ducks that quack. Yesterday's chill was a yawn in the 'Ville as most of our screens just seemed to stand still. "I wish I had just stayed put in the Butte," said Sammy the snake of his minxy pursuit, "We coulda saved ourselves some good loot and spent some Q.T. with our good friends to boot!" Will the stray Tuesday fray chase our boredom away or will we pass time at the sideways cafe? Come one and come all as we figure it out and ready ourselves for a minxy new route!
With last week's freak fresh in their heads, the Matador City committee entered Monday with some pep in their step. "Every bear in the world was leaning against S&P 1080," said a smug Hoofs while filing his nails, "and as soon as they lost their catalyst, they scattered like a buncha scared kids." He's not entirely wrong--and with 8000 hedge funds watching the same level, the bulls knew exactly when to punch the gas.
As is often the case with technical analysis, the higher prices have "improved" the mood of this particular metric. In addition to the S&P pokeman, the Dow Jones broke the downtrend that was in place since July. Further, as discussed on the 'Ville in recent weeks, the all-important banks "positively diverged" during the last stress test (by not making a new low with the broader averages) and provided leadership for the chaotic tape.
We now find ourselves at a most interesting juncture. The NDX has migrated back to an area of previous resistance (current support) while those very same piggies eyeball BKX 98 ("Level of the Year: 2004). To add insult to our softball injuries, and as a function of the recent jig, those frisky financials have now registered a stochastic sell signal.
I got a bit more constructive on the equity markets before I scooted to the 'Butte and late last week, before ducking out for a ride, I made some long sales as a function of 1) I was looking for a pure trade (and got it), 2) I had limited systems and a shifting focus (conference) and 3) I don't really trust the tape. That hindsight assimilation is past tense stuff, I know, but I share to lend perspective on our current juncture.
I'll always offer my honest take and the truth is that I'm still forming a feel after a week of attitude (altitude) adjustment. With that said, and with the hope of adding value at some level, I will remind ye faithful of how they felt six short sessions ago when the S's were at S&P 1065 and the N's were toying with NDX 1305. If you were having the spins then, you may wanna use this lift to find a more balanced posture. The goal is to be in a position to "buy down" and "sell up" rather than the other way around.
So that's about it as we toggle towards the opening. I've got the Murphy Tuesday thing going today (no TV, printer, systems or email) so please bear with me as I put corks on my forks. Deep breaths here-and deep breaths there-as we remember that the purpose of the journey is the journey itself.
Good luck today.
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