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Prelude to a Kiss

By

The brokers are breaking!

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I've paid my dues
Time after time
I've done my sentence
But committed no crime


(Queen)

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.

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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