Ain't Mutton but a Thang!
By Todd Harrison Sep 15, 2004 8:40 am
I hate being sheepish!
"We begin by coveting what we see every day. Don't you feel eyes moving over your body, Clarice? And don't your eyes move over the things you want?"
--Hannibal Lecter, Silence of the Lambs
Good morning and welcome back to silent slack. Yesterday's yawn is in the rear-view and the critters are here with their interest renewed. With earnings and Ivan and Elmer in store, I don't sense that Sammy will rest anymore. "There's a reason that vols are as low as they are," said the snake with his take on the Minxy bazaar, "but that all should change as we edge towards the bar and belly on up as we search for our star." Will Hoofy get up and snag the spotlight or can Boo turn the screws and put up a fight? A new day is here so let's shake off those jitters and take a new spin in the city of critters!
The lazy haze of recent days is in sharp contrast to the slew of news that is soon due. It started last night with a spate of tech drek (Xilinx (XLNX:NASD)) and Celestica (CLS:NYSE), continued this morning with Coca-Cola's (KO:NYSE) puke and Goldman's dumpage of software and hardware and the trading radar is filling up fast. With Ivan bearing down on the Gulf Coast and Elmer readying for his roast, there shouldn't be any shortage of catalysts in the coming days. Let's get ready to rumble, Minyans, and let's get ready to do it right.
There are a ton of crosscurrents in our midst as competing metrics vie for attention. Psychology has been the primary motivator of late as fund managers reach for their pens with one hand and stocks with the other. Fundamentals--as expected--are starting to make noise as we edge through this back-end loaded quarter. Elmer will shake up the structural mojo next week as he hikes through the transitory patch. Finally, we're sitting at a number of technical inflection points (Russell 566, XBD 130, BKX 100, NDX 1440, Toddo 217) that will offer a framework with which to trade. And lest we forget, we'll hold a vigil on Friday and pay our respects to the September paper we lay to rest.
While "overbought," "extended," and "pullback" are Googlable around the Street, we must respect both sides of the trading coin. Sometimes we tend to out-think ourselves and ignore the clues that are in front of us. Indeed, my recent calls around the Street have found lotsa folks buying 'em because they act great. While we surely must respect (not defer to) the price action, the mechanics or the swing have never been more important. In other words, play seven ways 'till Sunday and any way you'd like--but don't blindly bet as a function of the crowd. Those lambs will be silenced, Clarice, and nobody likes a black sheep.
We power up this Hump Day pup to find the softer side of Asia (the tricky Nikkei was off 1.2% and is sitting on dual support), Europe mixed (the German DAX is nestled above the 200-day but below the '04 trendline), a firmer greenback (+20 bips), pink (slightly red) metals and flattish oil. Stateside futures were laggy to begin with but have steadily slipped as this morning's news was spewed. S&P 1113-1115 is initial support for the old school while NDX 1400 is the comparable level for the four-letter freaks. Play smart, stay lucid, leave emotion to the other guy and let's mount this hump with some jingle in our jeans.
Good luck today and for those observing--A HAPPY AND HEALTHY NEW YEAR!
No positions in stocks mentioned.
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