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The Bird Herd

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Today should be about posturing, crude, breadth and leadership!

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Some people like to stay out late
Some folks can't hold out that long
But nobody wants to go home now
There's too much goin' on


(Eagles)

Good morning and welcome back to the flickering flack. The diehards remain and the data is comin' is shake off the fog and clean out that plumbing. A double dose of overnight verbose is on tap as the Mother Chip (INTC:NASD) (a mid-quarter proxy for the back-end loaded tech sector) and Beeks (who will weigh in with his vote of "transitory" or "NOT!") take center stage. They're important data points no matter how ya slice 'em but in this thin and anxious environment, these are heavyweights with a bantamweight crowd!

I've been weighing both sides of the equation and trying to take stock of the situation. The pure trader in me looks at the looming overhead resistance (S&P 1111) and twisty stochastics (across the board) and thinks that there's a rather defined downside try in front of us (advantageous risk/reward with tight stops). The caveat, of course, is that there are two potentially binary events in our midst and with the fourth string on the field, that dynamic only increases in scope.

The offset--and there are always two sides to every trade--is that the structural metric may have upticked. Crude--despite the eye-popping 5% lift yesterday--remains well below recent levels and clarity--whether you agree with it or not--has started to peek through in the Presidential election. Further, and this may be a clear case of paranoia self-destroyer, my inner voice is whispering that "some" would love to see the market rip higher into Dubya's big day. Hey, the stock market is the world's largest thermometer--would you really be that surprised?

From a tactical standpoint, I'm keeping it light and tight while defining risk on both sides of the trade (and yes, I'm allowing for a bit of both). Professor Succo and I have been discussing the levels of volatility for some time and while he made a salient point (as always) on the Buzz yesterday (about vols being relative), the absolute level of premium allows for select opportunities if approached correctly. I will again say that there are a LOT of reasons for the market to move--across all metric bases--and my sense is that a disconnect exists between perception and reality.

I'm gonna be out tomorrow as I've decided to focus the fruits of my Labor Day on my niece and nephew. New York City is a pressure cooker these days and I couldn't think of anything I would rather do than play super uncle and get silly in Baltimore. I know tomorrow's a biggie--trust me--but the only difference between working to live and living to work is the ability to practice what you preach. Something tells me that the next four months are gonna be killer and I, for one, am in serious need of a battery recharge.

Good luck today and just remember--you're a Melon!

R.P.
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