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Cinnamon Stick!


Consistent with what we've come to expect, hindsight will provide clarity and the bulls will be brazen if and when the tape scrapes higher.


A dreamer of pictures
I run in the night
You see us together
Chasing the moonlight, my cinnamon girl

(Neil Young)

Good morning and welcome back to the sunny track. The bipolar stroller we've come to embrace is getting more play than a hot Vinnie Chase. After two months of meandering between S&P 1220 and 1260, traders have narrowed the range in a four day exchange. We ripped 20 handles higher on Dove sightings, finished the week with back-to-back ten handle smacks and recaptured the flag in one fell swoop. It's enough to make us spin in our seats and, if we weren't strapped down, we probably would!

The question that has the world on edge is whether this particular shtick can stick. With so many uncertainties spanning the globe, we must ascertain whether this is yet another one-and-done run in the sun or the beginning of something more substantial. The technical context provides us with a tangible framework, both in the S&P and below NDX 1510, but that only addresses one of our four primary metrics. Consistent with what we've come to expect, hindsight will provide clarity and the bulls will be brazen if and when the tape scrapes higher. Indeed, pulling the trigger is the only difference between proactive positioning and post-rationalization.

Yesterday, in my opening missive, we chewed through a few minxy sub-plots including the fatal flaws of fundamental analysis, the importance of CRB 330-335 (reflation/deflation proxy), the race against the consumer clock, rotation station into safety plays and the potential Snapper in the homebuilders (HGX +3% yesterday). Those dynamics remain in play as we dig in anew and they're on my radar in the context of a "make 'em to take 'em" trading approach. I didn't coin what I coulda yesterday but such is life with a lighter and tighter (read: more risk adverse) approach. That's the other side of discipline, my friends, and it's an emotion that I've yet to truly master.

I opined on the early Monday Buzz that, through the lens of the "dollar devaluation vs. asset class deflation" lexicon that has served us in such good stead, com
modities and equities would likely reconcile their disparate agendas in short order. That played out in yesterday's fray as the metals, which were heavy on the heels of perceived peace, rallied to participate in the upside giggle (XAU +1.6%). They joined the drillers (OSX +3%), which bounced back after tough sledding last week, and both complexes remain my "go to" arenas when I'm looking for upside exposure. Again, I'm keeping close tabs on that multi-year trendline as a proxy for general liquidity with a conscious nod to The Phantom as the slayer of all dreams.

We power up this frisky pup to find our pipe full of earnings. Two names on my radar are Texas Instruments (TXN) and Centex the homebuilder (CTX). The former (in-line earnings) and the latter (cut guidance) are sentiment proxies as they've been beaten with an ugly stick. How they--and their respective sectors--respond to the news is entirely more important than the news itself. I'll also be keeping close tabs on the financials which, through objective eyes, have flexed relative strength (and potential downside non-confirmation during the S&P dip to recent lows). And, of course, all eyes will be watching S&P 1260-1264 as a technical inflection. Remember, Minyans, it's gonna be very crowded on either side of that ride so put limits on your orders and definition on your risk.

In Minyan housekeeping, we've SOLD OUT the Vail Cascade but have a few spots remaining for Minyans in the Mountains III. And lest you think I'm beating a dead horse by keeping this in front of you, I will offer that it's a seriously savvy investment with regards to both time and money. The idea generation, relationships, human capital, mindful experiences, friendship, fun, family and financial fitness comes to life once a year and we're a scant sixteen days away from lift-off. Trust me on this one---it's real...and it's fabulous!

Good luck today.


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Position in financials, metal equities
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