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The Minxy Mingle

By

Jazzy!

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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.


R.P.
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