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First Rate

By

Let the games begin!

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I am just a poor boy
Though my story's seldom told
I have squandered my resistance
For a pocketful of mumbles such are promises

(Paul Simon)


It's 'game on' in the city of critters as the first batch of news falls squarely in Hoofy's lap. Merrill (MER:NYSE), Johnson & Johnson (JNJ:NYSE) and Novellus (NVLS:NASD) are trading firm and, just for good measure, Beeks chimed in with robust retail sales. That's ushered in the asset class shuffle as investors rotate out of bonds and the metals and into the dollar and (thus far) equities.

All clear? Doubtful--the rate debate has already picked up in pace and that's offering pause to the bovine cause. Yes, higher rates are undoubtedly a by-product of a strengthening economy but remember, Minyans, the reflation trade was contingent on rock bottom rates. I'm not certain when the focus (psychology) will shift but be wary of scary rotations. Proof positive? Look at the REITS--it was thisquick!

I'll be looking for N's over S's and watching the financials, small caps, homies, utilities and retailers. I'll also eye the breadth (been laggy) and volume (been low) for confirmation of any technical formation. We're at a pretty intriguing juncture--either this is the thrust necessary to jump the hump (and potentially trade to S&P 1175) or the pied pipers will lead the long lambs to slaughter (in the face of good news).

Be careful, Minyans--this promises to be a wild ride.

R.P.

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