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Back Pain!


Tony: Why the long face my man...uh I mean my bear.

Boo: Are you outta your mind - everything is wrong with the economy, the tape is being manipulated and nothing tanks pragmatic boy - geeeshhhh.

Tony (with smile) - Dude, you gotta chill out. There is nothing wrong with this tape other than it is overbought and the fundamentals have begun to improve. This continues to be a good enough environment highlighted by this morning's economic releases. There was moderate improvement, but no blowout numbers.

Boo: You guys are all the same, could you put that in English - PLEASE.

Tony: Basically, the good enough scenario means the economic and corporate numbers should be good enough over coming weeks to allow stocks to basically hold the breakout levels from the range. It also means the numbers are unlikely to be good enough to cause another sustainable leg higher. This is a transition quarter from perception to reality and absent any dramatic news, it is likely to be marked by violent moves that make people feel like a breakout or breakdown is imminent - yet very little progress is made in either direction.

Boo: You are WRONG! Stocks are up so much without the fundamentals to justify it so a blasting is coming Snoop and you better get ready for it.

Tony: When you look strictly at the indices you appear to be right. When you go stock by stock you can see there seems to be an orderly move taking place. I simply don't see signs one would normally see before a real hit comes. Do yourself a favor and go through the S&P 500 stock by stock.

In addition, I continue to hear from investors that they don't trust the move, won't chase stocks and want to be a buyer on weakness. Typically, as the market pulls back the real test of interest comes. For now it seems there should be a pretty good bid underneath the market.

In other words, most stocks are in an orderly advance, the market isn't up on a spike and there are buyers indicated underneath. That is what a consolidation period (read: transition period) is all about.

Boo: Thanks for the talk Snoop - so I guess Hoofy and I are both going to be frustrated and Sammy will be attracting the attention...SWELL.

Tony: Yeah, I am going to walk around town and talk to Hoofy too...he seems just a tad too happy.
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