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Randoms: The Box Trot!

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The bulls try to rally the troops anew

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Have you ever wondered why A.D.D. people aren't championship fighters? I may have figured it out this morning while kickboxing at 6:00 AM. After warming up, my trainer and I sparred a few rounds as we usually do and sure enough, my mind began to wander.

The pre-market S&P futes are up a dozen, I thought to myself. THWACK! A hook to the ear.

I shook it off, grunted and got back to basics.

Was the "first move" lower (after the FOMC) or given the market ended higher, will that pave the way to a reversal today?

POP!
A poke to the nose.

"Dude, stop hitting me," I said as I shook my head, sweat flying to the floor.

"Pay attention then," he said with no hint of levity.

I went on the offensive and pulled together several combinations. Jab, jab, cross, hook, uppercut... Wal-Mart (WMT)? ZING! Right in the eye.

To say there's a lot going on now would be an understatement. To let it consume you at all hours? A waste, and a painful one at that.

Alas, here we are, strapped in and in the moment. Now is the time to focus, and focus I will.

First and foremost, if you were away from the fray yesterday, lemme quickly catch you up to speed in terms of my Hump Day content. There was:


With that context in place---to appreciate where we are, we must understand how we got here--I offer the following top-line vibes as we edge into the Thursday Dew.

  • John Paulson is a sharp cookie, no doubt, but I would venture to guess that his purchase of 168,000,000 shares of Bank America (BAC) is (at least partially) responsible for the one-month 35% gain. Keep that in mind if you're following the smart monty.

  • The FASB will discuss fair-value accounting at their meeting today and while most don't expect any accounting modifications to "hit" until late 2009 or early 2010, we've seen this movie before. Remember, Minyanville caught a lot of heat for suggesting the world's largest banks and brokers were insolvent in November 2007. It's always a conspiracy theory until it's not.

  • And remember, the key word is cumulative. The bar tab is building and the question isn't whether it'll get paid, it's simply by whom and when. That was the focus of my column earlier this week when we discussed caveats to the widely perceived transference of risk from this generation to the next.

  • Seeing both sides, Hoofy continues to monitor the tech channel (let's use NDX 1480-1630) as a bullish basing that's working off the overbought condition as a function of time rather than price.

  • Through objective eyes, the longer we slither sideways, the better it is for the bulls (year-end performance anxiety will soon begin to creep into the collective consciousness).

  • While I'm clearly concerned about the human toll of the swine flu, I'm equally conscience of the economic toll. Case in point India, where thousands of schools, colleges and cinemas shut down in and around Mumbai.

  • Tea Leaves? The flattish action in the retailers (in the face of punk retail sales numbers) is bullish, as is the general tone in the financials (Morgan Stanley (MS) and American Express (AXP) notwithstanding).

  • The dollar--a necessary precursor to, but no guarantor of, higher asset classes must also be factored into the mix.

  • For my part, I'm attempting to keep a loose grip on the handlebars, which is easier said than done in this high stakes game of chicken. In the two weeks since I slapped on this position at COMP 2007 (precisely where we are now), I've twice nibbled on exposure at NDX 1600 and tethered it back out at 1630. Just tradin'.

  • In the process, I removed one arm from the bear costume, which leaves three appendages (75% conviction on the short side) and a 2% stop above. Discipline over conviction--and an understanding that bottoms are points but tops are processes--as we together find our way.

  • As always, I hope this finds you well.


R.P.

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position in ndx, spx

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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