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The Rail Trail

By

Fare ye well into the closing bell!

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So, so you think you can tell
Heaven from Hell, blue skies from pain.
Can you tell a green field from a cold steel rail?
A smile from a veil? Do you think you can tell?


(Pink Floyd)


The minxy meander continues to buck as we edge our way through the Monday muck. In an effort to divert my attention from a fried Fokker (putting aloe on his nasty nose), I asked Hoofy and Boo to join me for a quick schnitz. As we ate apples and talked turkey, the conversation quickly zoned in on the marketplace. It sounded a little something like this.

Boo: I feel like I'm watching Multiplicity but instead of Michael Keaton, there are Hoofy clones everywhere! The teletubbies are frothing, the analyst community is cheerleading and investors have once again bitten the forbidden fruit. Talk about a mental masturbation!

Hoofy: Come on now, Boo--even you gotta admit that the tape trades firm. Snapper is working his way through EBay (EBAY:NASD), 3M (MMM:NYSE) posted solid results (shrugging off bearish comments) and the semis have tacked on another percent. Just another day at the office if you ask me!

Boo: Dude, EBay is simply filling the upside gap (created by the earnings drop), 3M couldn't have been more forthright with their economic assessment and the semis are the world's biggest short squeeze. Do you NOT see the action in the financials? If the banks and brokers continue to slip, dollars to doughnuts your dollars will be doughnuts!

Toddo: Guys, let's keep in mind that today's grindy (and light) action is a stage setter for the rest of the week. Yes, Boo, the piggies are slippy and yes, Hoofy, the semis are snazzy. That's why you've got an N's over S's day. Our other daily tells are a push, however, so don't try and squeeze water from a stone.

Boo: But Toddo, the banks...

Toddo: Oh, I see them Boo. The financials remain my single best tell and I'm watching them like a hawk. I would be surprised to see outright shruggage if Citigroup (C:NYSE) continues lower--particularly if we get through S&P 1035ish (on the downside)--but the crimson needs to spread to the other banks (and brokers) before it leaks into the broader tape.

Hoofy: So, you're still toying with that silly thesis of yours?

Toddo: Yeah, I'm still eyeballing The Burn but I'm not getting uber-aggressive on a press. I understand that there's a lot of information due out this week and I want to have dry powder should the whites of their eyes appear. As it stands, S&P 1050-1060 is the backstop for a trading drop and as long as that stays above us, Boo has a shot at some redemption. Now, if you'll excuse me, I gotta flip flop and serve...

The critters turned and walked over to young Lobster, er, Fokker's desk. They knew that these next few sessions were gonna be hairy and wanted to make sure the kid was up to the task. As I watched them banter with my trusty sidekick, I couldn't help but wonder which of these critters was gonna be bitter. One thing for certain....we wouldn't have to wait long to find out.

Good luck into the close.
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No positions in stocks mentioned.

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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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