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The White Shadow

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As long as the breadth holds, so should the tape!

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All the leaves are brown
And the sky is grey
I've been for a walk
On a winter's day


(Mamas and the Papas)

There's something very odd about the fact that I was wearing a short sleeve (Minyanville) tee outside yesterday and there's a fierce blizzard brewing today. Perhaps it's an omen for the Syracuse University hoops team? After all, there aren't many places that dump harder than the hill! Anybody who's trudged across the quad can attest to how brutal the weather is up there. Maybe that explains why I stayed in and studied so hard!

Speaking of dumping, the Minx has given back a chunk of her gains thus far and that begs the question: Is this a healthy pause or is she poised to roll over? The macro elements of the action (breadth, dollar, bonds) are still equity friendly (although not as much) and the we know that strong tapes tend to finish that way. There's also a fair amount of performance anxiety out there and, as we know, that works until it doesn't.

However, there ARE some caveats nestled in our midst. The biotechs and brokers (leading tells) have been noticeably lax and those stand out as the today's trading flags. Also, please note that on the daily charts (S&P, NDX, BKX), each rally has established a series of lower highs. Obviously, that can change on a dime but it's worth a mention as we trudge through today's muck.

The big catalysts (that we know of) don't start until later in the week and, as such, you can bet that war news and psychology will continue to lead the Minx around by her nose. Yahoo! (YHOO:Nasdaq) gets the party started Wednesday followed by GE (GE:NYSE) and a host of economic numbers on Friday. Until then, however, we're at the mercy of the last news blurb.

As you're aware, I took some action near today's opening in an attempt to "trade around" my posture. The "rolls" higher and initiations afforded me some higher priced "trading stock" that augmented the positions I carried in. With this pullback, I've nibbled on some of that exposure while keeping my "core" risk (at higher strikes).

I'm keeping both my legs in my metaphorical bear costume (for now) but I just wanted to share my process (right or wrong). This is, after all, an educational community.

Gotta hop and juggle. Be back.

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