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The Autobahn Express

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It takes a REAL man to give to charity--show me yours and I'll show you mine!

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Good morning and welcome back to the fast lane. We power up our systems this morning to find a flashing red German DAX which, as it stands, has violated Mamaluke support at 3000. I know most of you don't follow the European bourses but, let me assure you, this is a significant development. If you can (and yes, I know it's early), pull up a DAX chart-(DAX) (index) (GP) on Bloomie--and you'll see why I'm schvitzing. If this can't reverse itself back above the 3000 level, it will impact the global financial mindset-and with world psychology redlining, that wouldn't be a good thing.

The bulls will say that this is exactly the type of fear that's necessary for a Santa Claus rally but Boo the Grinch has other plans. Three short days ago, when the Minx was racing up the wall of worry, we saw funds pressing the long side in an attempt to break out the tape. Obviously, they didn't have enough gas in their tank and they were forced into the pits.

The question remains (and yes, I'm repeating myself but I think it's important)-what do these speed racers do if the tape doesn't find traction? The original razor burn thesis dictated a pullback from the previous October spike (got it), a hard lift that sucks everybody in (got it) followed by a melt that catches everyone off guard (and creates a bottleneck at the exit). Is this the bottleneck...or are the bulls still holding out that the traffic will abate? The answer to that question, my friend, will solve the great tape debate.

One step at a time, Minyans, as we merge into today's action. The big three-Morgan, Goldman and Lehman-will report this morning and that should help shape investor psychology. In addition, Monsieur Beeks will zip by with a handful of economic indicators (jobless claims exp. 400k, leading indicators exp. .6% and Philly fed exp 5.2), JPM Chase will be spending the day with AMAT, Jabil and Solectron will be reporting earnings and there's an ECB meeting. Finally, and perhaps most important, Hans Blix, the chief UN arms inspector, is expected to tell the Security Council that Iraq's weapons report is incomplete. Shocker there!

I walked into work this morning with both my legs snuggly tucked in my metaphorical bear costume (50% conviction on the short side) and my inclination is to maintain the S&P 900 "buy stop." There are some conflicting developments on the technical front (more later) but, as I'm now operating with a two day horizon, I'm going to stay tight and remain disciplined. Emotions remain high and traders are freaking-don't fall prey to their reindeer games as we sled towards Santa.

Today is the LAST day for our charity auction and, as it stands, Mark Mazzer is currently high bid at $3250. The one-of-a-kind, signed by all, 13" by 19" matted posted (see below) is framed in Plexiglass tm and will surely be a collector's item. Tis' the season to give something back to those less fortunate and, as 100% of the tax-free proceeds will be donated to The Ruby Foundation for Children's Education, what better way than to help kids learn and grow? It's good karma, pure and simple, and my grandpa is giving you the Ruby wink from above!

Good luck today.

R.P


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