The Trap Clap
Fare ye well!
Many have I loved
Many times been bitten
Many times I've gazed
Along the open road.
The afternoon drift is quieter than a mouse fart as the critters attempt to figure out who's zooming who. Boo's been running around the office with life size bull traps, convinced that traders are stuck long from higher prices. Hoofy, for his part, thinks the whole conversation is cheesy. "If it aint broke," he offers, "why try and fix it?"
Point of parliamentary procedure, Hoofmo--there has been some breakage in the indices. NDX 1375 was a one month trend line and (perhaps more importantly) yesterday's slippage broke the (steep) S&P uptrend from the March lows. The tricky aspect of this juncture, however, is that there are a lot of competing levels. As the hand stands, we're still migrating around the early September acnefest where the bulls have built base camp.
Today's action, thus far, is non-committal and reactive. The pressers pressed, the guessers guessed and now we're all sitting here stressed. Europe closed somewhat heavy and that, along with the stanky breadth, bodes well for Boo's crew. On the other side of the fence, the sticky semis are pacing the N's over S's trade and that's a constructive input for Hoofy's heroes. Still, it's worth noting that for every one four-letter freak that's up, there are two that are lower.
Outside of the Wolverine confidence number tomorrow, there isn't a whole heckuva lotta fresh meat to chew on. Further, alotta trader types will be scootin' early tomorrow to observe the Jewish holidays (including yours truly), so it's likely that the afternoon action will be whisper thin (and potentially volatile). I'm not sure if that's actionable, but it's worth factoring into your thought process as you craft the weekend risk profile.
I'm gonna hop like a rabbit (3-1-3!) but, before I do, I wanna share an honest thought. I, like all of you, go through my share of ups and downs and (naturally) it takes an emotional toll. Looking back at the last two and a half years (Ruby's passing, September 11, big career choices), there were times that seemed dire and (at times) hopeless. My grandfather used to say "this too, shall pass" and I never quite understood the depth of that wisdom until I was mired in muck. Sometimes it's hard to imagine things getting better but it's during those times--at the exact bottom--when the upside is the greatest.
Have a peaceful night.
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 firstname.lastname@example.org.
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