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The Dip Shtick!


First support in the S&P is 870 (then 860) and, for the techs, NDX 1050 (then 1020).


Well, my friends, he did it again and the ladies couldn't keep their hands off him! Fokker (with his parents Mr. and Martha standing nearby) strutted his way through Minyanfest and collected more phone numbers than a bathroom wall! "He's so cute," I heard one waitress say, "He's SO sweet" quipped another, "I can't believe he owns the WHOLE company" said a third. Wait a minute -- FOKKER! Wipe the lipstick off your neck and that schvitz eating grin off your face! We've got work to do!

The early morning futures are sluggish following a fierce weekend of war and hopes of a quick win are slowly being priced out of the equation. I don't think anybody doubts the eventual outcome but, as we've learned, risk remains on many fronts as we continue to find our way. Except a knee jerk attempt higher (off the opening bell) as conditioned traders buy the first dip and then strap yourself in -- it promises to be a wild ride.

In corporate news, Bear upgraded BNI and WOR, Solly booted DRI, Lehman upped RCL, Morgan raised numbers in Citi and Merrill while CS First Boston upgraded RD and downgraded BP. On the macro front, oil and gold are both higher while the dollar has given back some of its recent gains in overnight trade. Snoop Tone, fresh from Minyanfest, nicely illustrated these variable in his helpful morning piece.

While the psychological and structural metrics are clearly dominating the price action, it's worth noting the double top currently being formed in the NDX. Further, the S&P is in the process of making a third lower top (vs. November and January) at these levels. I know many traders have turned their back on technical analysis but I just wanted to put it out there. Often times, we'll look back with the benefit on hindsight and "see" the patterns with clarity. Profitability, however, requires us to step ahead of the curve with some vision.

Our tells today will remain constan -- the financials, semis, retailers, dollar, crude, bonds and the internals. What I'm trying to ascertain is how powerful the fear of missing is and, with quarter end looming, what type of pain tolerance exists. The market is uber-extended, the stochastics are flashing red and hope springs eternal. Will that matter? Absolutely. Is it today's (or this week's) business? Perhaps -- but we'll only find out by taking one step at a time.

I continue to have three appendages in my metaphorical bear costume (75% conviction on the short side) and, with all the schvitz stains, it clearly needs to find its way to the cleaners at a point. Timing, however, will play a critical role in Boo's fortunes and I'll be counseling him closely as we find our way. He added marginal (disciplined) exposure on Friday's close and will piece that portion out into the opening slippage. The rest of his decisions will be made as a function of price and time so stay tuned, Minyans, and stay sharp.

Finally, I want to thank those who attended Minyanfest yesterday -- it was awesome to meet the faces behind the emails! The warmth and spirit of my fellow Minyans is truly astounding and it reinforces my belief in our mission. Thank you all for your continued support and thank you Fokker for your hard work on a Sunday -- you're a good kid.

Hit 'em hard.

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