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Early Sniffage

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Hey Toddo--you call more audibles than a quarterback!

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The opening bell tolls and another week in Minyanville is officially under way. As expected, the opening thrust pushed the averages higher and the bulls are once again tickling technical resistance. The S&P is probing 850, the SOX has peered over 300 for the first time since January and the BKX is flirting more than Fokker.

Construction spending came in better than expected while the more important I to the ISM came in a tad light. Net/net, I'd view the aggregate economic numbers as a slight negative and focus will now shift back to our levels, the flow and chatter from the conference. It is worthy to note that Intel and other select semis are lagging early (Solly number cuts) while the morning breadth is firmly in the positive.

Do I believe we're "up, up and away?" No, I don't--as Tony's been alluding to, there is a lot of noise in the market and the tick by tick analysis is tricky at best (trust me!). There are going to blips and dips--that's what a market does--but I don't believe that THE stiff lift has already begun. That's not to say we can't have rallies--I'm just saying that I think they should ultimately be sold.

I'm admittedly debating what to do with my bear costume as I feel that the downside is a matter of when, not if. As we've discussed, there are a few ways to approach this juncture and your chosen path will be unique to your particular methodology. My sense is that there are potentially 20 upside handles in the S&P--so the question we must ask ourselves is what time frame we're using and what our risk/reward profile looks like.

I'm gonna stick with the fur for now--one leg--and I'll look to scale into further appendages at higher levels. Gingerly--not MaryAnn.

I'll be back.
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