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The Usual Prospects


It's a good thing I sleep in the buff!


"What the cops never figured out, and what I know now, was that these men would never break, never lie down, never bend over for anybody. Anybody."

--Verbil Kint, The Usual Suspects

Keaton once said, "I don't believe in Boo, but I'm afraid of him." Well, I believe in Boo, and the only thing that scares me is Hoofy's heroes. Indeed, the morning action is impressive given the nastola S-breadth and sloppy slippage in the brokers. Fund managers, anxious for performance, seem content to rotate into four-letter land and the relative beta it provides. You wanna see a tale of two tapes? Well this Minx will frip you -- she'll frip you for real!

The N's over S's environment is offering plenty of food for thought. First things first: The Nazz is ticklin' yesterday's high while the S&P just filled the opening gap. During this splendid sprint, I've been carefully monitoring the S&P breadth which, thus far, is maintaining a 2:1 negative posture. Will this morning's press (lower) provide the ammo for another leg higher, or was this Snapper a necessary precursor to some downside depth? Things that are making me go hmmm as I await lunch with the one and only Brian Reynolds.

One thing is for sure: It's a classic "suck in" one way or another, and while the benefit of the doubt rests with the bulls, there are some underlying differences this time 'round (the internals being the most notable). If I had to identify a theme, it would be the rotation game. The drugs continue to test DRG 350, energy is a battleground (on the heels of the crude data), the metals have lost a bit of luster (see Jason's piece), storage is firm (as discussed) and Fokker keeps talking about his new Underoos. Dude, bad visual!

The capture of the Iraqi #2 gave a swift bid to the tape and, as that vacuum subsides, we'll see where the chips fall. Remember, and I can't stress this enough, the looming expiration requires dealers to buy higher and sell lower so please understand the potential for whippage. If unsure, play a bit smaller (in between) and stay tight on your risk profile.

As always, I hope this finds you well.
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position in spx, pph
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