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Monday Morning Quarterback: Tis' the Night Before Christmas

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Play smaller, stay tight and remember that discipline must always trump conviction.

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Good morning and welcome back to the skeletal pack. Tis' the night before Christmas and all through the 'Ville, not a ticker is flicking as critters stand still. Yes, while we're in the last licks for these nutty ticks, there aren't many folks following today's fray. Heck, there's only three plus hours of action… can you really blame them?

We are, of course, here in the 'Ville, doing our part to ensure that ye faithful who've strayed into the fray are kept up with good company. Along those lines, and with some literary license, I'm gonna hop on to the Monday sleigh.

  • That Friday rally was impressive, right? It was nice to see some jig, particularly as we were sensing in our ample gut.

  • It's hard to argue with a 200-point gain, even if it did occur on expiration and took the S&P directly to the underbelly of our long-watched resistance.

  • What's more, the money center banks were noticeably absent from the party, which may have to do with the urge to purge these names from portfolios into year-end. Still, with the BKX sitting on multiyear lows, it's hard to put lipstick on those piggies based on what we've seen.

  • What can we read into the SIV Superfund close? Semantics, considering the Global Coordinated Liquidity Injection in recent weeks and the $500 billion since tossed in.

  • Everyone was saying LOOK AT THE VOLUME on Friday! Relax, Francis, it's expiration and activity should be at a much brisker pace. Even during the holiday.

  • Have you seen Hoofy and Boo's holiday list? It's pretty funny and most definitely worth the watch!

  • The most bearish thing on my screen? VXO 19.63. No fear at a time, I could argue, when fear should be priced into the marketplace.

  • I'm in all week (and doing FOX Happy Hour each day) but out next, visiting an old friend in Maui. I'll tell ya, I could use a few days away from this nuttiness!

  • With expiration influences done and doner-and everyone and their sister away-this week is a toss up in terms of the action. I can honestly see both sides-a rally directly to resistance (S&P 1490) followed by an outright fail or someone furiously pushing the "buy it now" button as they know how thin it is.

  • So, Merrill Lynch (MER) is selling its commercial finance unit to GE Capital (GE)? Yet another example of the transfer of wealth, albeit a stateside transaction.

  • With regard to the sales of stakes in Citigroup (C), Bear Stearns (BSC), Morgan Stanley (MS) and the like, I don't believe that sovereign funds "see something that we don't see." I believe that these transactions were affected from a position on "need" rather than a position of "want."

  • Play smaller, stay tight and remember that discipline must always trump conviction.


Happy holiday Minyans!

R.P.

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