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Winter Games


Thanks for the upside kiss, AMAT!


Good morning and welcome back to the creep and crack. Yesterday's glue in the Minyanville Zoo was sticky and green until big bad blue. As the bovine all cheered and both benches cleared, things got real weird when the bids disappeared. "If the bulls are all long and they fail to adapt," said Boo the thin bear (who is tired and tapped) "they just might get caught if this market gets capped and find that their rumps have all now been trapped!" Is Boo smokin' Blunts as he mumbles and grunts? Will the bovine attack spur the herd on all fronts? Saddle up, settle in for a most minxy ride and let's take a fresh sniff of the action worldwide.

The obvious focus this morning are the saucy semis on the heels of last night's (better) Applied Materials (AMAT:NASD) earnings and Broadcom's (BRCM:NASD) (expected) upward guidance. The chips have been a non-event since the first week in January--the SOX is basically unchanged--and while one company does not a sector make (think Analog Devices (ADI:NYSE)), this is the group du jour. Watch SOX 530 (540) as initial resistance and 505, 500 and 495 for potential downside stickiness.

We've discussed the non-confirmations (tech, trannies) and the importance of the four-letter freaks to lead by example. This will be put to the test today (N's over S's) and set the tone for the entire tape. Keep in mind, please, that if it weren't for Biogen's (BIIB:NASD) upside smilefest, yesterday's Nazz would have been down an additional 30 basis points. Now, as we ready for the new shampoo, the NDX is staring at its second reverse dandruff condition in as many weeks (one month chart).

Is it all tech all the time? Not on a bet. There's a ton of action for traders to sink their teeth into and sector volatility (rotation) is alive and well. Gold stocks are all over the place, the biotechs and brokers are going for broke (breakouts), media in general (and content plays in particular) are in vogue, energy (drillers and the integrated oils) are swinging like a Hedonism vacation, the risk arb community is going nuts, the cyclicals are vying for attention (non-confirmation there thus far), retail is trying to squeeze the shorts: Wal-Mart (WMT:NYSE) and the small caps (Russell 2000) should offer a good tell as we trade forward.

Away from the pure equity fray, and just to stay diligent in efforts to eye the world, it's worth noting that a new USA Today/CNN/Gallop poll shows Democrat John Kerry holding his largest lead yet over Dubya in a head-to-head match-up among likely voters (rival John Edwards also holds a double-digit lead over the president). The poll, taken Feb. 16-17, indicates that if the election were held today, Kerry would be chosen by 55% of likely voters, compared to 43% for Bush. In the last polling, Feb. 6-8, Bush held a 49-48 advantage. Why might this matter? Whenever there's a psychology bubble, we must keep an eye peeled for potential pricks that might lead to a crisis in confidence. Microstrategy (MSTR:NASD) played that role in 2000 and political strategy may take the baton this year. Today's business? Nah...but something to toss on your trading radar.

So, Hoofy and Snapper will try, try, try again to bust this nut through S&P 1160 and spike 'em to 1175. And, once again, we'll need to watch volume (been low), leadership (semis, financials, biotechs, cyclicals) and Fokker (as he settles into his new management role). This is either a churning under resistance (until proven otherwise) or a basing for the jail break (stored energy). Again, I can see both sides (as should you) and while I want to be more furry (and leave that door open), I've learned respect in my old age. Regardless of YOUR posture, I encourage you to stay nice and disciplined. As yesterday's trap door showed, when everyone is standing to one side of the boat, it can get water logged pretty quickly.

Finally, I've never been one to exaggerate (I've told you a million times) but I can't contain my enthusiasm for the new and improved Minyanville that will debut Monday. In addition to the new writers, new features and new elements, it's gonna offer revolutionary technology that will enhance the entire critter experience. It's just another step on the journey, mind you, but this one is gonna be a doozy!

Good luck today.

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