Blowin' warm out of the south over my shoulder
Guess I'll set a course and go
Happy birthday Neil Young and welcome to Minyanville. The critters have planned a big party in your honor (it's a surprise) but before we kick up our heels and toss one back, we have some work to do.
The first hour of trading was dominated by a spate of short covering and my contacts tell me that the gorillas (read: institutions) are for the most part quiet. This is an interesting juncture for the Minx as she's debatably oversold in the uuber-short term (when's the last time you heard that?) and the average-down crowd seems to be leaning against that fact. Let's take a look.
Whenever the market strings together a series of moves in a particular direction, chances are it will test that side again before reversing. I suppose it's a function of psychology as traders are conditioned and reactive, but (absent news) it's a decent rule of thumb. Just a random thought that I wanted to share before we begin digesting today's individual action. Out of the gate, the market did come in and briefly try the downside but I'm not sure that qualifies as a test.
Either way, the Minx absorbed the first wave of selling and that has buoyed the sentiment. The morning breadth is encouraging as advancers are leading decliners 2:1 (upvolume is trumping downvolume--but again, its super-duper early. Our trading tells are thus far pointing north and it will be interesting to see if they've got the muster to power through our resistance levels. Consistent with my desire to think out loud, my inclination at the moment is to let them lift a bit further and slip another leg back into my bear costume.
I'm jamming on my end so let me come back to you. Hope this finds you trading 'em right.
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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