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Sugar Mama

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I still wanna trade from the short side under BKX 98

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Oh, to live on Sugar Mountain
With the barkers and the colored balloons,
You can't be twenty on Sugar Mountain
Though you're thinking that you're leaving there too soon

(Neil Young)

Good morning and welcome back to the slinky slack. The Hump Day came then quickly left and left the ursine all bereft. "I thought the bulls would feel some pain," said Boo the bear with much distain, "but Hoofy and his green campaign are really driving me insane!" Is this a sign from the bovine that everything will be just fine? Or should we fear the deep decline that is the map of bear design? It's Thursday and there's lots to do so join me in this critter zoo!

Boo's frustration is easy to understand as disconnects litter the trading landscape. We can't erase the past--we, as a country, have lived high on the hog (whatever that means) for a long time and that excess will eventually unwind. Hoofy will quickly point to the pain of the post-bubble trouble and offer that the tab is paid in full but, unfortunately, it was paid with a credit card. And the longer that credit is outstanding, the more interest it will accrue. That, in a nutshell, is why the rate debate Carries weight despite the bovine so sedate.

Our task at hand--as traders or investors or parents or people--is to recognize the mountain of mishap as we forge our path up the hill. That trail is littered with empty promises and false hope as the bear market, by definition, makes life difficult for everyone. The cleansing wiped out lotsa bears in the bubble, a bevy of bulls when it popped and the ursine anew last year. Now we're in a de-facto trading purgatory that is churning the critters regardless of their particular market stance.

What is clear (and been in motion for years) is that the financial dynamic will continue to skew the earning curve. There are roughly 8000 hedge funds, a slew of massive mutual funds and countless day traders who are all chasing the same return tail. And while Elmer and his friends continue to pump liquidity into the system (creating currency), assets will eventually dissipate. Look at it as a standard two-sided scale. On the left is financial holdings, home ownership and durable goods. On the right is an ever-increasing debt load (individual and government) that is precariously tipping the balance. And we must note that the geopolitical landscape, while scary, is just an added concern to a delicate picture. The financial corner was painted long before 9/11 or the fall of Baghdad.

It will be an arduous path but one that we can navigate with the right perspective and a little help from our friends. That is the primary motivation behind Minyanville and why we're building a franchise of fiscal education. We don't claim to have the answers--I'm not even sure there are any--but there will be an increasing need for financial understanding as we trudge forward through the muck. Most folks are intimidated by the mechanism and rely on the motivated agendas of their chosen guide. The goal, and why we come to work each day, is to provide people with a platform to make better and more educated decisions for themselves.

We power up this Thursday pup to find Asia down a deuce, Europe straddlin' the fence and the dollar/metal duopoly frozen in headlights. The China rate spate is evidently the cause of the far east pause but the only thing more difficult than gaming liquidity is trying to gauge the perception of it. That is what pummeled the metals yesterday (along with the fugly charts we've noted) and raised the eyebrow of Carrie and her friends. The prom queen is still dancing (the dry mouth was isolated) but we must remain ever vigilant for signs of falling tiaras.

I gotta scoot up to a first grade "market day" for a few hours so lemme hop and fish out my pocket change. Please remember our primary tells to help guide us through the daily dance--Citigroup (C:NYSE) and BKX 98 (resistance), the semis (please read Fleck's take on the chip shtick), breadth (single best tell), the Russell (Carrie's favorite hideout), the internets and our technical levels (S&P 1125 and the downtrend lines above). We've got a handful of Beeks this morning, Intel inside tonight and a killer crops report tomorrow. Think positive and envision yourself in a profitable place--it's gotta start within.

Good luck today.

R.P.

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