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Achtung Baby!

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Is it getting better?
Or do you feel the same?
Will it make it easier on you now?
You got someone to blame


Heads up from across the pond, my friends. DaimlerChrysler (DCX) released their earnings report and the German DAX is getting Daxxed to the downside...and taking the rest of Europe with it. Blimey! Keep an eye on these overseas indices as a potential sentiment gauge as we prepare for a battle of our own. Stateside, the overnight news flow was skewed to the negative as earnings (by and large) came in light and the ABC consumer sentiment index registered its lowest reading since 1994. 1994? I still had hair!

As discussed in my first post, there are many crosscurrents in play right now and, to be honest, the short side almost seems too easy to me. Obviously, we'll find out soon enough and it will be interesting to see how the market digests this second dip and this latest round of bad news. Keep an eye on the banks in general and Citigroup in particular. The BKX stochastics are pixels away from a sell signal and the first support resides at 730. In semiconductor land, the recent data points have been abysmal but the group is heavily shorted. Support resides around SOX 238. Peripheral tells today include Cisco and Microsoft (bellwethers), Walmart (consumer proxy) and, of course, the internals.

The structural and psychological metrics will be the determinants of today's price action and we'll once monitor the fixed income market. Yesterday, for the first time in a while, bonds and Spoos (S&P futures) decoupled, so understand that this relationship isn't a given. There's been a lot of chatter that the bond market melt implies a "look through" that the economy will soon pick up--but if that's the case, wouldn't corporates rally in tandem with the Govies? Things that make you go hmm...

With the stochastics where they are, I wanted to toss out some other support zones for ya'll to put on your radar. S&P support is at 875 then 850-855, NDX support is 950 then 900, Dow Jones support is 8100, DRG (drugs) support is 290ish, BTK (biotech) support is 330 and XBD (brokers) support is 385ish. Obviously, with seven hours to go before the closing bell, most anything can happen so keep your wits about you and your right hand up.

Lots going on and lots to digest...but we'll need to save some room in our belly. That's right, sports fans, it's a special hump day edition of SushiWednesday here in Minyanville and the critters are lickin' their chops. Wasabi!

See you after the opening.
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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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