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Tempting Fate


The earlier the downside test, the better the chance for an afternoon smile!


I'll tell ya, as a big picture bear, the long side always feels a little funny to me--kinda like the feeling I used to get when I climbed that rope in gym class! Still, as a zagger, I try to force myself to look at the market with objective eyes on a daily basis. When things get giddy, as they did at BKX 800 a month ago, I like to take the other side. When the world is drekky, as it seemingly is getting now, my inclination is to dip a hoof in the water.

Naturally, I'm more comfy on the short side fade as, well, I think the market will ultimately trend lower. Still, as we've discussed, you've gotta make hay when the sun shines and that's what I'm (humbly) attempting to do now. I've got one leg in my metaphorical bull costume and while I'm admittedly nervous in front of the long weekend, that angst could very well be bullish!

In today's research, RBC upgraded BRCD and downgraded LU, CSFB upgraded A, Morgan booted MDT, UBS Warburg upgraded DD, FOX and UNP and punted GPS, LTD and PSUN. Meanwhile, Monsieur Beeks snuck by with some economic data and, juxtaposed against the current field position, it's net/net constructive.

AIG reported this morning and, after the drubbing it's taken recently, it's enjoying an early morning bounce. That's a potential positive for the financials which, in turn, could buoy the tape today. I continue to key off this complex as the single most important group in the marketplace. Other tells today include INTC (and the semis), WMT (and the retailers), Bennie (and the Jets), the dollar (slippy) and the breadth (doesn't lie).

Meanwhile, Snoop Tone just posted an excellent piece on the state of the tape and if you haven't seen it, check it out. His thinking actually lines up with mine (scary!) as I could "see" a short-term lift before the rest of the Shim plays out. That would alleviate the near-term coil and set the stage for the (inevitable?) breakage of the October lows. Then, perhaps, the Sham can find some sustainable traction. This is, of course, is pure speculation on my part but as I think it, you're gonna read it--for better or for worse.

Have a tremendous day!

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