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A Henley Hangover

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How will the trapped longs react?

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There are stars in the southern sky
Southward as you go
There is moonlight and moss in the trees
Down the Seven Bridges Road


(The Eagles)

Well, I've gotta tell ya -- Greg RN really came through in a big way. I'm not referring to the inaugural Fokker Chronicles, I'm talking about these awesome fluffy orange Syracuse slippers (National Champs) he gave me for my birthday. For a guy who's traded barefoot for 13 years, it's certainly an odd feeling. However, in our continual quest for mojo, we'll try anything once -- and maybe twice!

The lack of any kinda Snapper on the opening emboldened the bears, and when S&P 990 broke, we saw sellers of the futures pile in. The biotechs (slammed on good news), Fannie Mae (FNM:NYSE) (specter of derivative concerns), expiration (removed protection), impressive year-to-date gains (locking in) and a soft Europe are all contributing to the malaise. Now, THE trendline from the March lows is within spittin' distance and if the Minx doesn't hold S&P 975ish (NDX 1180ish), things could get interesting for Boo.

A quick check of the morning breadth reeks of halitosis, as losers are drubbing winners by better than 3:1. Also, the banks have already confirmed a rather classic looking head and shoulders pattern (look at a 21-day chart). If (big if) THE trendline doesn't hold at BKX 850-855, there may be ample reason for more tears after all.

Could Snapper emerge and turn the tide? With all the crosscurrents in play, we can't rule out anything. However, with each passing tick of crimson, it becomes increasingly unlikely. Watch those levels -- they DO matter -- and keep half an eye on the breadth, biotechs and brokers for any signs of traction. And smile, will ya? It certainly could be worse.

As always, I hope this finds you well.
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