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Beatle Bailey

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May peace be with you!

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Blackbird singing in the dead of night
Take these sunken eyes and learn to see
All your life
You were only waiting for this moment to be free


(Beatles)

Man, I've got the puffy eye thing going and it's only Hump Day! The tape is taxing and I suppose today's whips and trips were par for the course. Lower (and pressy) opening, mid-morning rampage, early afternoon slippage and some thin trading into the close. With the trading community this reactive, should we really be that surprised?

A couple of quick thoughts heading as the white flag waves overhead. Snoop Tone, with whom I am in constant communication, offered an interesting thought regarding the macro inter-relationship. The dollar was the first to drag lower and, after a lull, the bond market caught a serious bid. If the dominos fall as they may, are equities next to react (to the downside?). While we acknowledge that the correlation MAY be overblown, inter-market moves shouldn't be ignored entirely. Again, this isn't about advice, but we found it interesting and wanted to share it with our fellow Minyans.

Tomorrow's jobless claims (expected at 440,000) are the next visible catalyst on the horizon and that'll shape the uber-near term sentiment. While I'm walking home with both legs in my bear costume (50% conviction on the short side), the underlying bid in the tape (particularly the financials) must be respected. I'm conscious NOT to overtrade and, as discussed, I view higher levels as an opportunity (to add puts). I know that's a minority opinion right now but that's alright -- I'd be worried if there were 58.8% bears!

S&P 920-925, NDX 1120 and BKX 800 are technical levels to monitor on the downside and breaching any/all of them will be the first sign that something is amiss. In the meantime, the action is fine, thank you very much, and Hoofy will spend the evening practicing the Brazilian shuffle. Boo? He'll take his victories where he can get them these days and while he's got a long way to go, he knows that every journey begins with a single step.

Have a peaceful night.
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