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Doing the Morning Dew

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I feel so alone!

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It's an active morning in the city of critters but I wanted to get a quick missive out to my fellow Minyans. As it stands, the early morning futes are marginally green and that leads us to the same question we posed last Thursday: Is this on opportunity to "get involved" or, on the heels of positive earnings, is this a "sign" that sellers abound? Just another thing to make you go "hmmm" as we prepare for the nutty nut.

In research news, Opco downed RF Micro Devices (RFMD:Nasdaq); JP Morgan upgraded UPS (UPS:NYSE); Lehman boosted ChipPAC (CHPC:Nasdaq) while booting Jefferson-Pilot (JP:NYSE); UBS Warburg punted Juniper Networks (JNPR:Nasdaq); Dresdner downed Infineon Technologies (IFX:NYSE); Merrill lifted United States Steel (X:NYSE); Morgan Stanley kicked SAP (SAP:NYSE); Smith Barney downed Everest Re Group (RE:NYSE) and CS First Boston upgraded Continental Airlines (CAL:NYSE), BorgWarner (BWA:NYSE) and Pepsi Bottling Group PBG while downgrading Southwest Airlines (LUV:NYSE). Love for sale!

Important levels include our S&P 905 and NDX 1100 support zones (past resistance). On the upside, S&P 918ish (trendline) and S&P 930-935 should offer a stiffer test. In tech, NDX 1125ish (Razor Burn top) is the next technical ceiling. Lest we forget, our ol' friend BKX 800 is back in sight and while I'm suspect of its ability to clear that hurdle from such an extended posture, it's something to keep an eye on.

The breadth told the tale yesterday and it remains a focus today. Also watch the dollar (yes, it matters), the semis (SOX 340 first support), the financials (twisty and extended), the retailers (consumer proxy), our levels and Europe (the German DAX is now down).

We've discussed the potential for a false breakout and that should be factored into your mix as a potential outcome. Some would argue that, with so many traders using the same technical stops, they NEEDED to trigger before any downside could occur. Saucy? Yes, Béarnaise, but if there wasn't risk, it would be called winning -- not trading.

Happy hunting.
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