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Line Dance

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Alligators?

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Dressed myself in green
I went down to the sea
Try to see what's going down
Maybe read between the lines


(Grateful Dead)


The morning spew begins anew as we edge into the minxy zoo. I've made some calls around the Street and found some themes that do repeat. First, expectations of a correction are higher than I would have thought. Second, everyone wants to buy the dip (if and when) and, as we know, will self-fulfill until it eventually creates a bull trap. Third, everyone wants to know if that was Fokker on the Latin star search last night. I'm not sure (didn't see it) but when we spoke earlier, he kept saying "Bueno! Bueno! Bueno!"

A few quick vibes as we get going. Energy issues are under pressure as both the integrated oils and service names are for sale. The cyclicals, homies and trannies have also begun to slip and that's leading to some N's over S's action. I've heard rumblings of asset alligators (out of stocks into bonds) but I haven't confirmed that trade is out there yet. It feels like it is (it's very early) and I'll continue to sniff about.

Money continues to flow into some of the low dollar laggards. I've been eyeing Nortel (NT:NYSE) on a pure technical basis and, sure enough, it got a push this morning from a Verizon (VZ:NYSE) contract. I'm not involved (and don't have an opinion) but money is flowing into those type of names. The hallmark of this rally has been its intramarket rotation ability. If you sort your screens by industry group, you'll likely see what I'm saying.

The dollar has gotten some greenback and as it stands, the negative correlation (with equities) is in tact. Morning breadth is 3:2 negative, gold is flat and the pressure I'm seeing is a combination of profit taking and short sellers. Finally, if you haven't read Brian's piece this morning, please do so at your earliest convenience. It's smart stuff.

I'll be back.
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