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Dr. Jekyll and Mrs. Hynde


Valuation is in the eye of the beholder.


Gonna use my arms, gonna use my legs,
Gonna use my style, gonna use my side-step
Gonna use my fingers
Gonna use my, my, my, imagination

(The Pretenders)

Good morning and welcome back to ducks that quack. With yesterday's crimson fresh in our eyes, we ready ourselves for a minxy reprise. "The tape has been tough for the bulls in our midst," said Hoofy the bull feeling all kinds of pissed, "but this is a simple slap on the wrist and it'll pay off for the bids that persist!" Is he sniffin' glue at the Minyanville Zoo or can he see his trade all the way through? Come with us now as we're ready to thrill and begin our new day with a romp through the 'Ville.

The Matador City crowd has to feel like they cheated death after yesterday's narrow escape. The internals were dismal, the semis dropped to eleven month lows, high beta was under distribution and support levels got pounded like a chicken cutlet. And while there was relative strength in the piggies (watch these please), their fearful leader (C:NYSE) got sacked outa the gate and never fully recovered.

Trading is an art rather than a science for the simple fact that we can all look at the same picture and derive a unique meaning. Boo's crew will view the fingers on the ledge as a opportunity to get stampin', looking to turn current support levels into zones of resistance. Hoofy, ever the optimist, enters the session with some moxie after taking the very best shots the bears had to offer. "Hit me again," you can almost hear him saying in his best Rocky voice, "Again...again...AGAIN!"

Today's rematch promises to be brutal as patience is wearing thin in trading circles. We know that the most vicious legs of a trading move occur in an oversold (overbought) condition and we must balance that against the twisty stochastics and reactive bulls (who will buy higher and sell lower). The wildcard in the equation is the invisible (structural) catalyst that the bovine have leaned against for two years running. If we "carry on" through the election, as most assume we will, the reflation theme will be a shot in the bovine arm. If, however, Elmer leaves the economy to her own devices...well, it's every critter for himself!

I was keying on the piggies yesterday and, as a function of the relative strength, sensed that Snapper might make a cameo. While he pulled a no show, the financials managed to buoy the broader tape and end the session in a draw. They remain the key tell, in my view, but tech participation is equally important. The four-letter freaks gotta shake out the cobwebs and come to play if they're to stop the leaky faucet. Watch SOX 400 in that regard and pay particular attention to the horsies.

We power up this Tuesday pup to find a pink (slightly red) Asia, a firm Europe (DAX +1%), marginal strength in the metals, a flattish dollar and green stateside futes. Lotsa smart folks I talk to are looking for this downtrend to end with a "bang" rather than a "whimper" so it'll be interesting to see how traders react to higher prices (if and when). Stay on your toes, Minyans, and remember that discipline trumps conviction regardless of your posture or style.

Good luck today.

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