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Random Thoughts


A broken clock is right twice a day...


Somebody call Vince McMahon! The following tag team, which took place on this morning's Buzz, would make Adrian Adonis and Jesse Ventura proud.

  • The English Channel
    Todd Harrison
    10:44 ES

    Professor Bennet just shot me a snapshot of "the channel" in the S&P that's been in place since July. Thus far, the tape has paused at that level (he'll be posting graphic visualization shortly). My reply to him--so you know--was "interesting, just as the buy stops got swept."

    In other words, with so many buy stops triggered above the multi year high in the S&P---$3,300,000,000 in notional exposure, to be exact--alotta demand was used up to get to that resistance level.

    Hey, it's one metric (technical) among many---with psychology stepping up into quarter-end--but it's certainly worth noting.

    Particularly with the banks (BKX), semis (SOX) and nets (Google, Yahoo) dancing in Red Dye and the dollar (DXY +67 bips) at session highs.

    Stay alert Minyans.

  • Time for yet ANOTHER breather???
    Bennet Sedacca
    10:50 EST

    OK. Most folks I know are scratching their heads while examining the data points that are USUALLY effective and watching the SPX go to new interim highs. Present company included, to a degree.

    But look at the chart here. The SPX is in a VERY defined channel that was stopped dead in its tracks. I would also note the negative divergence that has developed as we reach higher highs. Not usually the best of set ups.

    Further, the VXO is below 11 and all of my bearish contacts are throwing in the towel (no acrimony guys, just talking).

    For my clients, I am not a short side trader as I was in my hedge fund days. Instead my firm hides in cash but it doesn't mean I can't trade for myself, which I do. But I use very defined risk and do trade from the short side. For what it's worth. And with tight stops outside that channel.

And now, back to our regularly scheduled Randoms....

  • While I truly believe that we hold all Minyanville content to uber-high standards, I would like to draw particular attention to the Monday missives from the savvy soothsayin' Jeff Saut and Television's JeffMacke®. Different vibes but both most excellent reads.

  • Speaking of Yahoo!, note that it's sitting on major support that dates back to early 2004.

  • 50,000 E-mini S&P's traded (on the buy side) around 10:30 this morning. That's roughly $3.3 billion in notional as "buy stops" and quarter-end programs kick in.

  • Minyan Tom sent me an email this morning and, as his buddy was gonna have face time with Big Ben today, asked if there were any questions we would like to ask. I forwarded that question to a few fellow Minyans and my inbox is suddenly flush with "Answers I Really Wanna Know..." Go get 'em Tommy, and let ye faithful know what he says.

  • How the heck can we know if there's a hard or soft landing if the market is a leading indicator and monetary policy has a six month lag? Is it as easy as looking at a chart? And which chart should we look at? The CRB (crash landing) or equities (currently denying that any landing whatsoever will take place).

  • "The Oil Service HLDRs (OIH) managed to clear the first resistance hurdle at 126 (should act as support here) with the next potential stop the gap between 130 and 131. Also watch the Housing Sector Index (HGX) as it has resistance at today's high, 215.50. A move through there opens up more bullish opportunities in this counter-trend bounce." Pepe Depew on today's Buzz.

  • Minyan Neal asks if the Lowes and Lennar action (bought on bad news) is a sign of a top. No sir, it's actually a sign of a strong tape. The reaction to news is always more important than the news itself although we must remember to respect--not defer to--the price action.

  • A broken clock is right twice a day and, on cue, the metals (XAU +3%) and energy (OSX +2.5%) are finally out-pacing the piggies (BKX -40 bips).


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