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Talking Turkey

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Stepping out of the dentist's chair, I couldn't help but think that this morning's stitchfest was the proverbial frying pan. Indeed, I walked back into my office to find the futures on fire and the mood on the street absolutely sizzling. During Friday's free association, we alluded to the necessity of this technical breakout (for the bear thesis to unfold), but it always seems harder to see the forest when the trees are growing right before your eyes. The cheerleaders who are urging you to buy stock won't reimburse you if the market reverses, so make decisions consistent with your means. Remember, emotion is the enemy when trading and lucidity is our friend...leave the pom poms to the Raiderettes and let's get to work.

We often discuss the virtue of patience and ours will surely be tested this week. There are several binary events in our midst and, taken collectively, these will go a long way in shaping the market's tenor. In the meantime, we'll continue to digest the daily nuances with hopes that we can find some profitability along the way. In that vein, throw NDX 1052 and S&P 923 (August highs) on your radars as new levels to monitor to the upside. With the long side getting a bit crowded (especially after this morning), the obvious question remains: is it too late to buy? I would offer that the answer to that is a function of your risk profile and time horizon-not to mention your overall market thesis. There is a big difference between respecting the price action and deferring to it. Make this distinction before you start stamping tickets.

Tells today will once again include the financials (in front of the FOMC), the semi's (extended but crowded), retailers (consumer proxy), biotechs (sentiment), the U.S Dollar (for signs of slippage), Bonds (alligator watch) and the Microsoft/Cisco duopoly. As always, we'll also be factoring in our trading flow and the market's internals as we find our way. The opening flurry promises to be hairy and the first half hour is always noisy, so factor that into your process.

Once again, let me remind you that the disclosures at the bottom of this page are not recommendations to play along. We have an extensive book and, while I will always list positions I mention in a particular post, there are many more in our portfolio. Thanks!

See you after the opening.
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