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Stone Cold


He ain't heavy, he's my brother


Well, they'll stone ya when you're trying to be so good
They'll stone ya just a-like they said they would
They'll stone ya when you're tryin' to go home
Then they'll stone ya when you're there all alone

(Bob Dylan)

Well Boo, you finally got your day in the rain and when it pains, it pours. It was inevitable, I suppose, as the law of averages dictated that the green seas would eventually part ways. Now we're faced with the zillion dollar question of whether this is a "healthy" pullback or a sign of what's to come. Take a deep breath, Marvin, and let's take a look at what's goin' on.

As we know, the Minx likes to travel the path of maximum frustration, so it's no shocker that she'd wait for May's protective put paper to expire before sliding lower. The expiration may be one of the contributing causes (a layer of underlying demand has been removed), but it certainly isn't the only culprit. Stocks were (are?) extended, complacency was (is?) everywhere and the long side was (is?) uber-crowded as a function of performance anxiety.

Will today's pimple pop the ears of the high-flying bulls? Well, for the first time in a long time (no pun intended) there's been some technical damage. The trendlines from the March low are sayonara and BKX 800 is (thus far) in the rear-view mirror. Further, if we are to subscribe to the notion that the longer stochastics "pretzel twist," the more vicious the move in the opposite direction... well, there's a whole lotta salt out there.

While I remain steadfast in my (bearish) big picture belief, the notion of the down/up/DOWN thesis continues to linger in my head. I don't know if that's today's business (it doesn't feel that way), but it is tempering my urge to press. I've parceled out of a handful of my puts (discipline) and rotated some risk away from issues that are down a lot (relatively). I still have my leg in the fur and want to be in a position to use prices to my advantage.

If Snapper is to make a cameo, I would think he'd have to do it soon. Markets that are heavy all day tend to end that way and today's tape is tipping the scales. Keep in mind, please, that this week will get thinner as Memorial Day approaches and, as such, those with an agenda will carry more weight. Man, I can't wait for fat Tuesday!

Away from that, it's more of the same. The macro tells are equity unfriendly (dollar/gold/crude), breadth is a mirror image of what we've seen lately and the leadership sectors continue to lead us lower. These are stressful times, my friends, and I hope you're finding Minyanville helpful in your decision-making process. It's not easy, that's for sure, but we'll get by with a little help from our friends.

If you'd like a little perspective, Casey and I are attending a Jacob's Cure function tonight as we join Jordana in an effort to save her son. I penned a piece about getting "it" on Friday night and, as we all struggle to gain our financial footing, it's important to remember that it could be worse.

As always, I hope this finds you well.

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