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Field Position

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Let's wander slowly through the fields
Slowly slowly through the fields
I touch the leaves that touch the sky
Just you and I, through fields of joy


(Lenny Kravitz)

This is one stone groove, man...there's free love everywhere! Do you want to see the psychological metric in its full glory? Take a look at this morning's research. It seems as if the street has woken up from a deep slumber and decided that stocks aren't that bad after all. It's human nature, right? Despite the pummeling equities have taken, the fear of missing remains a palpable emotion. As stocks rise, money is pulled into the market via a "long squeeze" and performance anxiety begins to permeate. It is, in many ways, self fulfilling...until it stops.

More importantly, the bull's found their upside validation in this morning's earnings reports. The financials, autos, specialty finance, consumers...they all put on a good face and the premarket futures are getting jiggy. I've never been one to make excuses-not my style--and I was clearly too conservative in my approach entering this week's releases. That said, opportunities are made up easier than losses and we must look forward, not back. The question remains: Where do we go from here?

I spoke this morning about the "frame" in which we view the tape and my deliberation between trend vs. phase. While it certainly appears that the bulls have the ball, I would like to make a couple of observations. As it stands, we're slated to open right near the mamaluke resistance zone of S&P 870. This is a level that we've been discussing for some time (much like S&P 775) and now that we're there, it should be monitored. One week ago today-ONE WEEK-there was nary a reason to buy the tape and the collectively psychology was drekky into a big support level. Today, it's hard pressed to find a reason to SELL the tape, investors are giddy and we're approaching big resistance. Just a little perspective as we roll up our sleeves and prepare to battle.

There will be no rationalizing in this space, only discussion. There remains a lot of information and a ton of trading to digest between now and Friday, including October's expiry which will likely exacerbate the price action (both ways). It would be glib to brush off this morning's reports, but I would remind you that timing is indeed everything. IF, in fact, this is a new bull trend, it's worth noting that there can still be bearish phases nestled within that trend.

One step at a time, my friends, as we wade our way through these most interesting times. By doing this, we may not arrive at our destination as quickly as we'd like, but we're less likely to stumble along the way.

See you after the opening

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