The morning breadth is bordering on halitosis as the decliners are trumping advancers 2:1 and downvolume is dwarfing upvolume 4:1. As you know, these readings can change on a dime but they've been good tells for the intraday action so they should remain a focus. The other thing that jumped off my screen and bit me was the ability tape to blow through our support levels. The next areas of support are S&P 870ish followed by more substantial support at S&P 830. In tech-land, a steady diet of 50 point increments should be used and as such, NDX 950 becomes the new "floor." Again, it's uuber-early and we've got a long day ahead of us--stay disciplined.
Crude oil is up a 2% and that's lifting the energy stocks early. Biotechs have also traded well out of the gate and should be noted. More important, however, is the action in the semiconductor/financial duopoly and, thus far, they've been better for sale. Keep an eye on the XBD (brokers) as well as the BKX (banks) in that complex. As far as individual tells, balance the green CSCO action against a heavy GE and MSFT.
Again, it's early and while I continue to "trade around" a bearish thesis, I'm in pick (not press) mode into the early decline (discipline). Also, be on the lookout for any statement out of Iraq. If history is any guide, Hussy will probably comply with the U.N resolution and we may get some lift out of that. Ultimately, as his credibility is spotty at best, I think that rally will peter out. Just my humble opinion.
Good luck, Mon frere.
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 firstname.lastname@example.org.
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