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Down Town

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This is one heavy load!

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Glowing and burning
Blinded by thirst
They didn't see the stop sign
Took a turn for the worse


(Eagles)

The daily drive through the Minxy muck continues and, thus far, the critters are staring down a one way street. Bonds are gettin' thumped, equities are belly soft and we've had smelly breadth since we woke up. This, of course, doesn't mean Snapper can't come out and play...it simply means that our resident tortoise has his work cut out for him.

The glimmers of hope today? The cyclicals, biotechs and internet space all act dry and if (big if) the tide turns, those groups will likely lead. The trading wires have quieted substantially (after this morning's massive supply) and it seems as if everyone is thinking the same thang. Is this a healthy and necessary basing or are we churning through another topping process?

While the script is still being written, the plot is about to thicken. The star players? Earnings, for one, as the supporting cast turn to face the nation. There's been a little something for everyone this reporting season and the good (cyclicals), bad (outlooks) and ugly (tech wrecks) camps are about to broaden. The consensus, thus far, is that earnings were "good but not good enough" (to justify their recent run). Look for more clarity as we listen to the collective assessment this week.

The technicals are also "stepping up" as the we approach a few important levels. The series of higher lows (and higher highs) in tech is still very much in tact as we hold NDX 1225. On the big board, the bottom of the trading range resides at S&P 962 (July 1 low) and, while further support comes into play at S&P 950, Hoofy doesn't want to surrender that level.

Finally, the geopolitical area should remain on everybody's radars. I'm not implying that Elmer's credibility, Dubya's tough talk or infighting on the hill WILL spill equities but they certainly have the potential to do so. That's the fine line we're now walking....wildly bullish sentiment can self-fulfill but it's also prone to disappointment. With everybody seemingly on the recovery train, any derailment is likely to cause many casualties.

That's about it on my end as we wade through another day of flickering ticks. On a personal note, I'd like to congratulate Rick and Robin Schottenfeld on the birth of their son Max. Mother, son and the rest of the clan are all doing splendid. Rumor has it that the first thing Max did upon arrival was check the overseas markets. Hey, if the apple doesn't fall far from the tree, it wouldn't shock me at all! Much Mazel, guys, and all the very best for you and yours.

Good luck into the close.
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