Quick Missive from Rubyville
Hit 'em hard!
I am traveling for business today and it will be difficult for me to post. As I had a free moment, however, I wanted to pen a quick missive and touch base with the Minyanhood.
After Friday's nonevent, the morning tone is firm and the same dynamic (from last week) remains in play. S&P 1050-1060 was--and still is--formidable technical resistance and that's the hump that Hoofy will attempt to mount. He's had a couple of runs at it and with each try, a layer of supply is absorbed. The single biggest question, for traders, is whether the bulls are already loaded up (and would be trapped if the acne doesn't spread) or if they're simply storing energy before putting (yet another) sprint.
While "stop orders" likely exist above resistance, the tape remains extended (stochastics) and, thus, vulnerable to potential reversals. Watch the financials as a tell (the brokers have a similar chart to the S&P), the breadth (been a solid read), the semis (higher thus far), biotechs (heavy) and Fokker. Somebody always has to watch Fokker.
This "area" is highly charged with emotion so take a deep breath before diving into today's muck. How you approach it (climbing aboard or selling into strength)--will go a long way in defining performance. For my part, I'm happy to roll up stops on existing long positions and add "cheap underneaths" (downside puts) into the ramp.
I'll be back in the saddle tomorrow morning. Good luck today, my friends, and hit 'em hard.
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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