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The Squeaky Wheel


Watch the internals for signs of slippage or traction.


Big wheel keep on turnin',
Proud Mary keep on burnin',
Rollin', rollin'
Rollin' on the river

(Creedence Clearwater Revival)

The morning juice is on the loose as the critters search for ways to produce. The initial fade (sale) gave way to another fade (buy) and the indices are now settling into their daily dance. For my part, and so you know, I'm juggling some tech issues (sorry to those having log in problems) and preparing for earnings season so this Monday morning has been particularly frustrating. Thanks for your patience, Minyans, it's much appreciated.

Friday's fugliness was centered on the industrials and continued our theme of sector rotation. When markets are uber-extended, there are a few ways that condition will be alleviated. A smack down (long time coming), "rolling" corrections (sector by sector) or a sideways basing. Thus far, the rally respites have been a combination of the last two and served notice to the bears. If you're gonna prosper, you're gonna have to really want it.

A quick check of the morning breadth finds three winners for every loser with marginally better sniffs in four-letter land. The dollar is trying to find some footing, gold has exhaled slightly and fixed income has tacked on further gains. Inside our equity ride, retail remains sluggish, the internets are a bit slippy, semis are trying to hold their acne level (semicaps are lagging) and the financials are mixed (watch Citigroup (C:NYSE)).

I humbly opined last Thursday that the chasers might be choking in a week's time and I'll stand by that view. It's not advice--it never is--but the thinking was that a gut check is long overdue and snazzy earnings are baked into these levels. The caveat to that thought is the human nature and emotional state of the tape. I can't begin to tell you how many "panicky public" stories I've heard of late--I'm just not sure how far along in the process we are.

I'll be back--hope you're jinglin' baby.
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