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Telephone Tag

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I'm keeping my mouth shut as to not mush the mojo!

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Call me (call me) my love
Call me, call me any anytime
Call me (call me) for a ride
Call me, call me for some overtime


(Blondie)

I've spent the last ten minutes taking the pulse of my brethren and asking if it's too easy that a trading top is formed as a function of "blow out" Intel (INTC:NASD) earnings. We know that bear market rallies always end on good news but could it be so obvious? That may be a moot point but it was floating around my crowded keppe and I wanted to seek outside counsel.

The collective response was...muted. As we discussed earlier, there are a lot of ways to play the tape and I've gotten "it's bad action," "the first fade was the easy fade," "it depends on IBM (IBM:NYSE),"they failed again at S&P 1050" and "hey, was that Fokker at the Cubs game?" For my part, I'm consciously trying not to over-think and have traded "in between" to a degree (I nibbled on some puts and am staying alert for two-way intraday opportunities).

The action in the financials stood out like a sore thumb on the opening bell and they're still heavy betty's. It's been a while since Citigroup (C:NYSE), Bank of America (BAC:NYSE) and JP Morgan (JPM:NYSE) were down in concert and that's worthy of a nose scrunch. I suppose you can't blame them for being tired but we've been patiently watching for piggy weakness. Watch this sector, please, as everybody else is.

What's interesting, however, is that the semicaps are (thus far) the driest eye on the board (in the face of less than wonderful Intel capex specs). This is probably the most crowded trading sector and the only thing I can think of is that the gorillas are trying to squeeze the bears and buoy sentiment. As we discussed last night, that's how the mind games work. Fokker and I have been pouring over the charts in that complex and wondering whether they're obvious (trading) shorts or longs. When we juggle between the two and can't definitively come to a conclusion, we step aside and let them tell us where they want to go.

Breadth has edged to 2:1 negative in late morning trade with more relative lethargy in the S's (BKX v.s SOX). As it stands, and to quote my pal Brian Reynolds, "the genie is back in the bottle." What he means by that is the S's are back below the much discussed 1050 level (for now). Keep in mind, please that we're barely an hour into the session. N-V-T-S nuts!

As always, I hope this finds you well.

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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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