There's something so appealing about a critter who's in touch with his feelings!
The Artist formerly known as Hoofy swung by Main Street last night to check out the latest show at the Gallery for the Arts. From what I understand, there we're some collector's items and the (former) bovine asked me to inform the readership. I explained to our cuddly buddy that this column is predicated on the financial markets and there would be no shameless self-promotion here. Still, as there are limited edition pictures available and 10% of the proceeds will be donated to The Ruby Peck Foundation for Children's Education, I told him I'd sneak in a plug.
Back in life, back to reality, traders are rolling up their sleeves as they prepare for either "Terrible Tuesday" or "Turnaround Tuesday." We understand the crosscurrents in play-we've broken support but we're down a LOT in a very short period of time. If it's possible that this recent pullback was the "easy" trade (from extended levels and into the First Boston tech fete), the next few sessions will likely be a tad more difficult to game. For my part, I'm sticking by my Razor Burn thesis although I'm quite conscious that for every action, there is an opposite reaction. Ebb and flow, baby.
With yesterday's slippage, the S&P closed only six points above the October 15 close (thanks Jodi) and I think it's fair to assume that the dip buyers are somewhat concerned. The next level of support for the S&P is the 875-880 zone (followed by S&P 850 and then our old friend S&P 775). On the upside, S&P 900 (and then S&P 915) will act as resistance. For the four-letter freaks, NDX 1000 will be the first support while NDX 1050 (past support) will serve as resistance.
The Red SOX, on the heels of a 22% vomit-thon these last six sessions, remain the psychology barometer for the tech sector and I'll continue to monitor Micron. The financials in general (and Citigroup in particular) will set the tone for the old school as they "do work" at BKX 750. Peripheral tells will include storage (in front of tomorrow's Solly conference), media (acted fugly yesterday), the bonds, crude and our trusty internals.
Lest we forget, Sir Elmer Greenspan will be swinging by Minyanville around 2:15 to do nothing and anything more (or less) would create quite the stir, mousie. In the meantime, I continue to hop around with one leg in my metaphorical bear costume and will continue to set an S&P 905 "buy stop" to define my risk. I've been racking my brain trying to ascertain the path of maximum frustration but nothing has crystallized yet. Big picture I remain confident in my (bearish) view but on the nuance front, it's a bit fuzzy. As such, I'm thrilled at the prospect of defining my risk as I find my way.
For the option players out there, the "easy" trade on the "long vol" side has probably already taken place and, as such, I'm cutting down on my theta. I'm not kicking all of my paper, mind you, but we caught a nice little trade and I'm scaling out. So you know.
Tick tocking towards the opening bell and I've got to go save those poor bagels from Bucky (the fastest hands on Wall Street). Before I go, a little technical tip. Some of you have noted difficultly logging into the site once you've registered. It's important to note that the login process is case sensitive and must be entered in the same way each time. Hope this helps, Mon frere-gotta hop.
See you after the opening.
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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