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West Coast Offense


An oversold bounce is due...but do you sell into it?


It's a brisk (early) morning in the city of Angels and the critters are actively scurrying about their Los Angeles digs. There's a collective spring in their step as they know that this is a big week in many ways. Before they play, however, there's a truckload of work to do...and they're just the critters to do it. Buckle your seatbelts--the Minyans are mobile and on a mission!

In morning news, Solly upgraded the semiconductor capital equipment group (to overweight) and General Motors (to Buy) and issued a positive report on Cisco, UBS Warburg upped Juniper and punted Dell (Buy to Neutral), CS First Boston cut specialty softline retailers, Citigroup reported earnings ('there') and housing starts were better than expected.

As you're aware, I slipped out of my bear costume late Friday and I'm currently without a metaphorical posture. While my reasons for wanting to hang with Boo are still very much in play, we know, from the morning post, that it's important to identify a time frame and trading style that serves as an extension of your mindset. After the 5% snip in the Nazz, 12% clip in the SOX, 9% nip on the BKX and a general malaise in the market, one could argue that we've already seen the "easier" trade. From a broader perspective, I think that fading (read: selling) rallies will serve us in good stead. For purposes of my chosen style (punch count), I've regrouped the troops and will take a fresh look.

The obvious keys today will be the financials in general and the brokers (XBD) in particular, the SOX (dandruff!), crude (chatter of Venezuelan settlement) and the internals. Also keep an eye of Microsoft for follow-through. Historically an "insider window" opens a few days after the roughneck from REDmond reports (insider selling).

I've got a lot of thoughts on the market and, as I'm sure you know, the Raiders big win in Sunday's A.F.C championship battle...which I'll humbly share as we slowly approach the biggest game of my professional life. As I made my way down Highway 5 yesterday (Oakland to Los Angeles), it was a silver and black caravan. I have to say, it felt good to be among my people!

See you after the opening.

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