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Randoms: The Moment of Truth

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The most important level of the year is again upon us

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A fresh five-session set explodes on the scene as Hoofy wrestles control to start the week. With S&P 950-55 thisclose and the CIT Group (CIT) kick-save fresh in our keppe, an initial upside thrust made sense. Now, of course, comes the million-dollar question: Where do we go from here?

Some top-line vibes as we soak in the flickering ticks:

  • Much as we spy green seeds in a Red Sea (stocks that trade "dry" during waves of supply), red beans in a Green Sea (heavy stocks in an "up" tape) offer equally interesting clues.

  • In that vein, please note super-tell Bank of America (BAC), Citigroup (C), Intel (INTC), UnitedHealth Group (UNH) and Qualcomm (QCOM) are slinky Sally's to start the week.

  • I generally like to give post-expiration hangovers (Monday's after expiration) a few hours to shake the cobwebs (as dealers square outstanding positions).

  • As that fog lifts, a fresh sniff of the tea leaves finds NYSE internals 2:1 positive, mixed equity tells and a lower dollar (which is a necessary precursor to-but no guarantor of-higher asset classes).

  • The asterisk on this equation is the monster resistance directly above. While I generally hate levels everyone is watching (I avoid crowds unless they're at concerts or sporting events), the proximity of that level, coupled with tomorrow's Turnaround Tuesday, offers cause for pause.

  • Most folks believe it's simply a matter of time before we break on through to the other side. With that in mind, it's interesting to note the put/call ratio is at the lowest level since the rally began (signaling complacency).

  • How 'bout Turtle and Jamie Lynn, eh?

  • Y'all see the pension problems percolating with our neighbors to the north? I would expect to see more of these "flair-ups" as the point of recognition permeates that there isn't enough money to go around.

  • A loyal Minyan who works at a high-end retail establishment just pinged to inform me "We've noticed in the last two weeks a huge shift in consumer mood. It's such a pleasure working with people once again!"

  • While the meat of my positions are autumn leaves (remaining put positions that expire in the fall), my discipline slipped last week. Why do I share my missteps? With hopes you avoid them altogether. The trick to trading-much like dieting-is that while everyone slips at times, the key is never to fall.

  • If you're staring at every tick, you're likely out-sized with regard to your risk. If you've got a game plan and can hold on to the handlebars with loose grips and an open-mind, trade 'em seven ways till Sunday. Where you stand is a function of where you sit.

  • While Foreigner can't hold a candle to me of late, I will offer that barring a mad dash higher through S&P 955, the stage will be set for some crimson fret into tomorrow, if for no other reason than to keep Hoofy honest.

  • As always, I hope this finds you well.


R.P.

No positions in stocks mentioned.

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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