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Fish or Cut Bait

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The last few weeks have lacked motivated sellers in any regard.

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Good morning and welcome back to the grand rapids. The bulls have been swimming on golden pond lately and it's driving the bears absolutely loony! Hoofy, wearing rose colored Speedos, has surfed his turf to impressive gains despite the shark infested waters. Will Boo recover and teach the Minx the swan dive or will he continue to play sulky salmon to the psychotic stream? It's Turnaround Tuesday in Minyanville, Norman, so grab those rods and let's catch Walter!

I'm a pensive guy by nature but lately, the town hall meetings have gotten a bit louder upstairs. It's one thing to discuss the potential for a "blow off" rally and opine that (false) technical breakouts are a conditional element of a meaty melt. When assimilating our trading metrics, however, instincts and inputs sometimes arrive at different conclusions. As my former partner Matt used to say, successful traders know when something matters and, more importantly, they know when it doesn't. This is one of those times.

As someone who's "technically inclined," I'm acutely aware of the flirtation with November's Razor Top (NDX 1155 and S&P 955 are the intraday highs). I'm also keenly focused on BKX 800 and Dow Diamonds (DIA:Amex) 86 as the latest breakouts in a long series of acne prone averages. What I'm attempting to do is balance those "carrots" vs. the blind optimism and "what me worry?" complacency that currently abounds. In my "movie," the technicians needed to give this rally their stamp of approval before it ends and the ink pads are open.

S&P 955ish is THE "cut bait" level for a whole heckuva lotta traders, and that scares me. Not because it'll act as a magnet, but rather because it'll shake out the last bear standing. One the one hoof, discipline dictates taking that signal and stepping aside. On the other paw, that's the very definition of capitulation and, after the run we've had, it smacks of falsehood. Each of you must make your own interpretation and balance the risks vs. the potential rewards.

The early morning futures are a bit slippy on the heels of last night's coordinated terrorist attack, continued SARS fears, Bernstein's downgrade of Cisco (CSCO:Nasdaq) and Merrill's downgrade of select semis. As my friend just opined, the spooz would likely have been down double digits a few months ago but traders are conditioned to buy ANY weakness. That's bullish for as long as they've got the bullets but, historically, that arrogance has proved to be short lived. Stay tuned!

Finally, HOLY COW! There sure are a lotta Stones fans out there and it seems as if I've stirred a nerve. I'm not dissing Mick -- I like a lot of their songs -- I'm simply saying that MY top five includes U2 and if I had to punt one of the mainstays, he wouldn't get much satisfaction. I did a top five greatest rock band poll a few months back but, as the Minyanship has exponentially expanded, let's try it again. Send your response to mailto:Fokker@Minyanville.com and turn it up!

Good luck today.
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