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The Minxy Mingle




I said a couple shots of whiskey
Critters `round here start looking good,
A couple more shots of whiskey,
I'm going down to Minyanwood.

(Grateful Dead)

It was a mindful Monday night as the critters gathered at the Birdland for some chat and chow. As Snapper stood center stage and blissfully blew on his sax, his buddies huddled at their usual corner table and soaked in the vibe. There, over a pitcher of sangria and a slab of tasty apps, they talked tape and mused on the current state of the Minx. The conversation went a bit like this:

Hoofy: If August was a summer bummer, September is marching to a different drummer! Two short weeks ago, Katrina had folks freaking about energy shocks and forced liquidations. Now, with the benefit of hindsight, it looks like that frightening spike put in the '05 top for Texas tea while the only liquidity we've seen has been from an accommodative Elmer. Noice!

Sammy: Hoofy has a point-commodity prices, as measured by the CRB, have recaptured the entire Katrina related spike with the recent 5% pullback. Input levels are far from cheap, we know, but alotta bets (long commodities/short equities) have been unwound and that clearly exacerbated the price action of late.

Boo: That's exactly what I want to see-alotta optimism spurred by short-term structural influences that take us directly to massive resistance (S&P 1250ish). The oversold nature of the tape was my primary cause for pause at the end of August and, after this latest lift, most of my mainstay stochastics are getting equally lofty. Be afraid, Hoofy, be very afraid!

Hoofy: I'm a bull, bro, the only fear I have is that I'll miss the rally. With quarter-end a few weeks away, portfolio managers are watching each tick with anxious anticipation. Further, the action in the brokers (acne through XBD 173) should serve to embolden those players with itchy trigger fingers. Don't hate the player, Boo, hate the game. And the game right now is that you gotta get exposure.

Boo: (pulls out a yellow flag from his back pocket) You see this cookie? I'm saving it for when you and your buddies are once again caught offsides. Whatever happened to both sides of the trade? You can focus on the brokers-I'll choose to flag the banks (which are a glaring non-confirmation of this latest lift). You can talk about the pullback in commodities-I'll maintain that low tide isn't good for any asset boats. You can anticipate the acne-I'll patiently fade (read: sell) into it with disciplined stops defining my risk. In other words, Hoofy, bring the noise-it won't be the first time we battle and it certainly won't be the last.

There was a palpable tension in the air as the two critters stared deeply into each other's eyes. It's been a long year and they knew that alotta eyes were gonna focus on quarter-end. We've seen a ton of moving parts in 2005-more motion (in the sectors) than movement (mainstay averages remain flattish) and that promises to remain in play as players jockey for position.

As the critters knew their next day tells (levels, financials, beta (nets), rotation (watch the energy patch), macro), they decided to leave the tussle for the Tuesday hustle. If this past weekend reminded them of anything, it was the importance of balance and the necessity of perspective. As Snapper wailed and the critters cut a rug, the flickering ticks were far away from their collective radar. They knew, as do we, that there would be plenty of time for stress when the opening bell rang.

Good luck today.

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No positions in stocks mentioned.

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

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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