Prelude to a Kiss
The brokers are breaking!
I've paid my dues
Time after time
I've done my sentence
But committed no crime
Tim Brown, receiver extraordinaire, just swung by our west coast digs to give the critters a high five and to get a read on today's tape. Hey Heisman, nice tune! I know that a surly Sapp and a dangerous D are the only things standing between you and your ring but don't let them get inside your head. Football, like trading, is all about execution. Play your game and focus on the minutes-the hours will take care of themselves.
A few themes have begun to emerge. First, the N's over S's dichotomy is beginning to stand out as the brokerage sector is weighing on the old school. On the other side of the fence, Cisco, Microsoft and Oracle are buoying the techs and, if Intel can join its horsemen brethren, it would bode well for the "bend but not break" crowd. You know that my feeling is that further downside is a matter of "when" (not "if") but, for purposes of today's column, we must read the daily tea leaves. For instance, when a hedgie walks into the pits (like he just did) and buys 500,000 SPY...and the market ticks lower, I view that as an indication of supply in the street.
Last week's drubbing not only worked off the overbought condition, it left us marginally oversold in the short-term. As such, that backdrop must be factored into your short-term strategy (bullish or bearish) as we find our way. There are surely opportunities to prosper on a daily basis but you're not going to see them if your pressing and guessing. Take a deep breath and try to identify that elusive edge...it's out there.
As an aside, I wanted to take a moment to talk technicals. A lot of readers have asked me which charts I look at and the answer, more often than not, is "yes." I watch differnent types of technical analysis with hopes of identifying actionable levels...whether they're on a one day, five day, one month or one year chart. Once found, I like to juxtapose them against point & figure work. For those unfamiliar with P&F, I encourage you to visit www.dorseywright.com and read up on the service. I've been following it for over ten years and if an A.D.D guy like me can focus on ANYTHING for ten years, well, it's worth a look.
The southland fog continues to roll over the Hollywood Hills and the internals are starting to do the same on the street. Keep that right hand up, baby, and just win.
I hope this finds you well.
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 email@example.com.
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