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Jack and the Beanstalk

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It's too early for a rally!

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Sugar Magnolia, blossoms blooming
Heads all empty and I don't care
Saw my baby down by the river
Knew she'd have to come up soon for air


(Grateful Dead)

The Minx sprouts green to begin our week and the games have officially begun. I have mixed emotions about this opening as miniature Boo is sitting on my right shoulder (ala Animal House) and screaming "Fade it! Fade it! Bang the heck out of those bids!!" On my other shoulder, a tiny Hoofy (dressed in a toga) is whispering "Todd, we know it's thin out there and the tape is relatively oversold. Stay disciplined!" I see both sides but I'm leaning more to the right as, well, I'm already half-dressed in my metaphorical bear costume (50% conviction on the short side).

The clearest theme out of the gate is the "S's over N's" action (S&P outperformance of NDX) and that's occurring largely on the heels of the financials. A general rule of thumb (for me, anyway) is that the banks are to the S's what the SOX is to the NDX. With the banks up almost two percent and the SOX flat, the action shouldn't come as a surprise. A check of the morning breadth supports this view as winners are beating losers 2:1 on the big board while it's more muted in four-letter land.

I gotta think the market is a "fade" (read: sale) the first attempt at 900 (there now), so I'm going to toss my other hat back on and play trader. I've got a lot going on in my crowded keppe right now and I've always used this column as a catharsis of sorts. As I continue to edge through this transition, I will share some thoughts with the readership such that we can share in the experience. It's all good.

Thanks, and hit 'em hard, baby!


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