Hey Toddo--did you see Tony's comments about the short term stochastics?
Its super-quiet this morning and, as such, the news that is out there has been getting more attention. For instance, the ABC/Money Magazine weekly consumer confidence reading tumbled to -22 (from -17) and that's being tossed around the trading wires. Also, Intel Chairman Andy Grove's comments (from yesterday) are being chatted up as he's on the tape saying he has "no was of guessing how long it will be" before the industry recovers. I don't think this is "new," per se, but as it's being discussed, I wanted to pass it along.
The market bounced yesterday and alleviated some of the oversold condition that was caused by the recent meltage. As Tony so eloquently points out in his opening piece, there are different perspectives with which to view the tape. His thoughts dovetail nicely with Sammy's earlier observations regarding time horizon and trading style, which is no shocker given they're both sage (and relatively hairless) creatures. If you're trading for the day, your approach is distinctly different than if you're setting up a risk profile for a broader (longer term) thesis. In other words, know what you're looking for before you start hunting for exposure.
The spirited semis bounced back yesterday and recouped some of their recent losses although it's worth noting the potential head and shoulder formation (negative) on the monthly chart. For the broader tech tape, NDX 1050 (former support) should once again act as resistance while NDX 1000 is the first support. Finally, the S&P continues to migrate around the all-important 900 level and support rests below at 880ish while resistance lingers above at 915 and then 930.
Keep an eye on the volume today as yesterday's session was a tad light. Conventional trading wisdom dictates that "moves" on light volume should be viewed with a raised eyebrow and, while it certainly can be an aberration, it warrants a mention. I'll also be monitoring the VIX as yesterday's pullback brought it right to its 200-day support (31.68). For the neophyte Minyans among us, the VIX (volatility index) is a contra indicator for the tape and will typically move in the opposite direction.
That's about it for now, but while I have you (and it's quiet) I wanted to walk through our end of year schedule. Snoop Tone will be out Thursday through Sunday as he's taking his clan to Disney World (the important stuff). He keeps asking me who is saucier-Snow White or Cinderella-but I told him I only have room in my life for one fictional female. For my part, I may take off the last week of the year to find some balance of my own. I haven't finalized my plans but I'm a big believer in practicing what I preach and, if we truly work to live, I've got some catching up to do. As always, as soon as I know, you'll know.
See you after the open.
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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