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Minyanville Early Morning Market Report


An early bird's look at the world.


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

It's Labor Day -- so to speak -- as the Street eagerly awaits Non-Farm Payrolls (8:30 a.m.) and the ISM Manufacturing Report (10:00 a.m.). Waiting to exhale indeed; the German DAX (-2.5%) is edging closer to our 5800 price target, there's all sorts of stress in the system (Greece, French banks, hard landing in China), and the persistent myth that lower crude is equity positive is (finally) slipping into the ether. Let's party!

While I'll be at a business breakfast from 8:00 a.m. to 9:00 a.m. -- no, seriously -- I'll be back by the open with fire in my fingertips (as I rosin up my bow). I will say this, and take it for what it's worth: If the S&P was indicated up 14 handles, traders would have sold them with both hands. Through that lens, an "in the hole" opening, with so much data on tap, may be the most bullish pre-market scenario in the price action spectrum.

Some top-line vibes, in no particular order:
  • The above vibe notwithstanding, I still believe the S&P works to 1200-1250; I just don't know if it's in a straight line. We, of course, don't need to figure that out yet; we simply need to follow our steady stair-step process and let the market tell us where it's going, practicing discipline over conviction all the way.
  • Should S&P 1300 support morph into resistance, the bulls will circle their wagons at the 200-day (1285).
  • BKX 44 -- and we closed eight pennies away from that toggle yesterday -- remains a terrific near-term clue in the fuse, as per the chart below. I do not believe we'll witness a waterfall decline without downside participation by the financials.
  • I covered my Google (GOOG) short yesterday (it's indicated down $8) and bought a small call position in Apple (AAPL) into the close (I spy reverse dandruff), which is indicated down $3. Always early? Yep, that's me, but honest, for what it's worth.
  • The rest of my powder? Dry, and safely tucked away. When the dust settles there will be mas opportunities and I wanna be in a position to deploy capital when I see the whites of their eyes.
  • I offered on Tuesday that I've softened my stance regarding Facebook (FB); that I was no longer a long-term put-it-away buyer at $28-30. Where do I perk up for a trade? $23-$25 vibes in my mind but I may be over-thinking things.
  • LinkedIn (LNKD), F5 (FFIV), Netflix (NFLX) and Salesforce (CRM) are all in "multiple compression" phase -- most likely on the heels of Facebook -- but as long as we see sector rotation rather than outright migration, the bulls can, and most likely will, claim victory.
  • T-minus 11 days until I move my family out of NYC, as per my longstanding desire to buffer my children from the belly of the beast. I'm not looking forward to the commute but that is certainly a trade I'm willing to make.
  • Good luck and I'll see you on the Buzz & Banter (click here for a free two-week trial)!

Twitter: @todd_harrison

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