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Tell Tale


Fare ye well!


So, so you think you can tell
Heaven from Hell? Blue skies from pain?
Can you tell a green field from a cold steel rail?
A smile from a veil? Do you think you can tell?

(Pink Floyd)

The afternoon trip has picked up some zip as traders grab hold and tighten their grip. I returned from my midday mind meld to find the critters grazing on a host of green fields. The financials (Citigroup (C:NYSE)), semis (KLA-Tencor (KLAC:NASD)), small caps and cyclicals all trade firmer than a college cheerleader. Heck, even Fannie sidestepped its earlier spankin' and administered yet another equity enema. What's it all mean? Come with me as we chill in the 'Ville and walk through the zoo.

One of two things is happening here. Maybe the Minx is bustin' at the seams and, once tomorrow's unknown passes, there will be little left to stop her. The piggies and chips support that view (as does the breadth) and a whole lotta shorts have now licked their wounds and headed for the hills (it's safer there). The pure "eyes" see the constructive action building momentum and while you may not agree with it, you gotta respect it.

The other scenario is that we're still in the throws of resistance and short-term sentiment is frothy. As such, and despite today's jig, the tape remains vulnerable both into the close and after tomorrow's orange crop report. Hard to imagine, I know, but this could be the shake out before the return trip to Red Dye Junction. Assign whatever probability you choose, my friends, but understand that it's one of the possible outcomes.

Understand that there is a fair amount of 'gap risk' in tomorrow's number. Further, and just to add spice to the Minxy mix, it's an uber-crowded event. A huge outlier either way prolly tilts the scale but marginal differentials will be lurky and murky. Professor Reynolds wrote a fine road map and I encourage all Minyans to read it before the closing bell. For my part, and just so you know, I'm small (and defined) potatoes with a short bias. It remains to be seen if my positions get mashed, fried, baked or peeled.

I'm gonna flip lids and tickle ticks as we dance towards the closing bell. I will simply ask that you remain lucid and disciplined while leaving a margin for error. And no matter what happens tomorrow--whether the S&P is at 1000 or 1300--don't look back and kick yourself for not being bigger, smaller or there at all. We gotta base our decisions on what we know and see right now so leave the wouldas, couldas and shouldas to the other guys. It's wasted energy.

As always, I hope this finds you well.

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