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Lickin' and Tickin'


Watch the breadth, kiddies, watch the breadth.


How do rumors get started,
They're started by the jealous people and
They get mad sellin' something they had
And somebody else is holdin'

(Timex Social Club)

So, this is the world we live in. The early morning chatter triggered a "sell first, ask questions later" Pavlovian response by traders and, when the bogus rumor didn't pan out (thank goodness), the pressers and guessers turned and covered up. That explains the blip-dip-blip action but ushers in a new slew of questions as we face the day(s) ahead.

I did see a slew of sellers out of the gate this morning (both individual names and ETFs) but trying to game a monster European sell (buy) program is a lesson in futility. You never want to base your risk on a catalyst you can't see and other people's orders are their business, not yours. You can always factor in what you're hearing but don't base your trading decisions on it. A'ight?

I'm looking at a mixed bag right now. The Fannie Mae (FNM:NYSE) and Freddie Mac (FRE:NYSE action is flat out bearish, in my opinion, but the ability of the other financials to shrug it off is (thus far) bullish -- and quite curious. If there is a hint of systemic risk in the system, I've gotta believe that it'll spill over into the rest of the group. Granted, I'm a big-picture bear in this complex so take this with a grain of salt (whatever that means). My thesis, however, is partly predicated on this exact sequence of events. Stay tuned.

With that said, the tape hangs quite nicely. Breadth in the S's is marginally positive, big cap tech is green, the rotation into drugs continues (PPH) and the number 13 (sessions until quarter end) is ringing loudly in the ears of anxious portfolio managers. Can anybody say hot potato?

I'm still hoppin' in my one furry leg (25% conviction on the short side) with a "soft" stop above Friday's highs. Truth be told, the action in the GSEs is giving me a serious short-side itch but I'm not pressing. I've got some puts on, I've got some "relative" long side rentals and I'm humbly trading until something meaty emerges. I will offer this: Everybody I speak with thinks they ramp 'em into quarter-end. That, to me, implies that there will be some sorta sellin' before then.

In our Minyanville all-time pitcher poll, young Fokker informs me that the following five made the starting rotation. No. 5: Tom Seaver, No. 4: Pedro Martinez, No. 3: Bob Gibson, No. 2: Roger Clemens and the ace of the staff -- Sandy Koufax! I know, Mr. Roque, Cy Young, Nolan Ryan, Warren Spahn, Lefty Grove, Bob Feller and Satchell Paige got stiffed!

As always, Minyans, I hope this finds you well.
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