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Moon Over Manhattan


Kiss me--I've got gorgeous breadth!


Because I'm still in love with you
I want to see you dance again
Because I'm still in love with you
On this harvest moon.

(Neil Young)

The opening screens are flush with green as we edge into the trading scene. The early tone is firmer than a college cheerleader and the financials have grasped the leadership baton out of the gate. It's hard to find fault with the BKX (banks) or XBD (brokers) technicals as they're popping with acne. While their stochastics are twisting on top (bearish) and unknowns remain (earnings), they're showing no signs of wiltage. If the razor is gonna burn, the financials will have to fan the flame. Watch this complex as a chief trading tell.

A quick check of the morning breadth is rather minty (3:1 positive) and all signs point to a testage of our much discussed S&P 1050 level. Outside of the draggy internet action, there aren't many flies in today's ointment. The dollar is firmer, gold is soft, Europe is jiggy and the tide is rising. It's reminiscent of Thursday's tape, to a degree, and that reticence (to bite) may prove to be a bullish input.

I'm treading carefully in today's (thin) action and looking for front month cheapie punts (both ways). Earnings will typically pump volatility (to unattractive levels) so I'll sometimes look to identify periperheral plays (names that trade "with" companies that report this week). Option pricing mechanisms are generally efficient in that regard but if we marry our metrics, a tangible "edge" will often emerge.

I'll be back.
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