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See Change

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May peace be with you!

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Trouble with you is the trouble with me,
Got two good eyes but you still don't see.
Come round the bend, you know it's the end,
The fireman screams and the engine just gleams...


(Grateful Dead)


The afternoon tape is a thrilling escape as the clay in the fray begins to take shape. The action this morning was the definition of fugly-the breadth was firmly ensconced at 2:1 negative, the financials-led by a thinning Aunt Fannie (FNM)-were a hall of shame and multiple levels looked ready to give. Fast forward a few hours and a couple of fallen follicles and-Shazzam!-there just might be life in the Matador Crowd.

We've been chewing through the flickering ticks on the Buzz (it's a more "time sensitive" application) and openly wondered if today's fray is the mirror image of last Tuesday's scrimmage. As you may (or may not) remember, Mother Morgan's melt (MWD) edged the XBD through support which, in turn, hammered the internals and took the tape lower. This morning's news that Morgan will look to Discover hidden value seemed to buoy the Wall Street wizard. Whether or not this action is a long-term fix isn't really the issue-the news sparked a rally in the financials (AIG fanned the flames) and it was game on in the city of critters.

What remains to be seen is whether this bounce is an intuitive defense near monster support (DJIA 10,375, S&P 1160) or a more telling turn. I remain of the humble view that there are serious cracks in the financial foundation but that doesn't mean it has to be in a straight line. The value that I can offer ye faithful is to share a running assimilation of our metrics and, as it stands, the probability spectrum is relatively wide. There is support below, resistance above (S&P 1200, BKX 99) and a whole lotta noise in between.

As I scribe the afternoon vibe, market breadth is trying to flip the switch and embolden the bulls. If (big if) the tape can follow-through (on the upside), it'll set the stage for an upside retest of the aforementioned levels. Dancing between the elephants? Perhaps-we're one shoe away from some serious carnage and we know from experience that support (and resistance) gets weaker with each subsequent test. The constant thread of any successful trading strategy remains consistent discipline and risk definition.

Shifting gears for a moment, the NCAA tourney will shake a tail feather tonight and crown a new champ in the college ranks. Despite my gripes about Syracuse, this is the best match-up possible and an all-around win for the fans. Both teams are loaded, deep and physical and the game should be fantastic. Minyan Mark Bloudek has a slight edge on the field and it's his tournament to lose. I've already paid homage to our philanthropic "opt-in" and, at the very least, The Ruby Peck Foundation for Children's Education will find another $1000 in its coffers tomorrow morning. Noice!

Fare ye well into the bell.


R.P.
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