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Brothers Bear


Foiled again!


Sometimes I feel, sometimes I feel,
Like I been tied to the whipping post
Tied to the whipping post, tied to the whipping post
Good Lord, I feel like I'm dyin'.

(Allman Brothers)

Good morning and welcome to the mourning. Elmer arrived with some jig up his sleeve and attempted to shift what the masses believed. Just as he started to pat his own back, Chambo arrived with a mighty bear whack. "Guidance was soft and their back rooms are full," said Boo to the bears as he peeked through the wool, "It's gotta be tough being a bull when the weight of the world constantly pulls!" Were the jazzy green screens a quick one and done or can the bull clan continue the fun? It's Hump Day (again?) so breathe deep and chill as we ready ourselves for a romp through the 'Ville!

Taking a step back (along with that deep breath), the recent rumblings have turned to grumblings. Between an outright fugly employment report, continued inventory issues in tech and eye-popping energy costs, you can't blame the bears for feelin' ornery. And just in case we didn't "hear" Cisco (CSCO:NASD), Kulicke and Soffa (KLIC:NASD)--a small but important semicap stock--and Nat'l Semi (NSM:NYSE)--a not so small semiconductor chieftain--should help turn up the volume.

On top of these fundamental downticks, we must again note the textbook technical action. The S&P, on the heels of Elmer's 'all clear', dutifully filled the gap created by Friday's bunk opening. We've spoken about how S&P 1080 (former support) has morphed into formidable resistance and we retraced that vacuum into the closing bell. The morning news and views seem to be focusing on the four-letter freaks but the tape, in this case, is trading in synch.

On the other side of the coin, Alfred E. Greenspan is putting on a brave face and offering calm assurances. With a crimson paint brush in one hand and a corner behind him, he maintains that the economy is strong, energy pressures are transitory and cats and dogs are dating. While we must respect his potential to flick the liquidity switch (we can't see his other hand), I continue to feel that the biggest risk to the market is a prick to the psychology bubble. That may or may not be contingent on Fed credibility, but a lack of confidence certainly doesn't help.

The seas seem angry today, my friends, so tread carefully and beware of the undertow. Crude, which banged its keppe at $45/brl yesterday, should remain on ye radar as a sharp drop has the potential to flip psychology. Other than that, the ducks have cast their ballots in Red Dye and the onus is on Hoofy to prove 'em wrong. Watch the piggies (BKX 94), the breadth (best tell yesterday) and the clock--only eight days remain until our Minyan Mountain Magic and the critters are getting jacked!

Good luck today.

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