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Testy Tape

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Watch those banks, cookie--they'll tell the tale

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Traders will be traders, I suppose, and the temptation to fade (read: buy) the opening seemingly lured some bulls back into the mix. I'm a notorious zagger and I've done my requisite "picks" into the red sea but, on the whole, I continue to trade around a short-side thesis.

The economic numbers came out with factory orders a touch light and ISM a bit better. On the whole, it probably nets out to the positive and we saw a quick spate of short covering before the market settled back in. The morning breadth is showing early signs of halitosis as losers are outpacing winners 3:1 on the Nazz and 3:2 on the big board.

Meanwhile, the red SOX are being clipped for 7% and, according the ultra-svelte and always handsome Mr. Dwyer, they've now retraced the same amount as they did during last year's pause. He and I have been actively debating the significance of last year's move as it relates to this year and, while thus far it's been lock step, my concern has been (and is) that it's too scripted for the Minx to follow suit. Stay tuned, cookie-this one's gonna be interesting.

I continue to feel that the banks hold the key to the market's vault and they've been trying to find their footing on the long side. BKX 768 was last week's low and now that we've breached it, this level will serve as the near term resistance. In the broader tape, the bulls are furiously defending their technical lines in the sand. If you're an active trader and you're "leaning" against these levels, make sure you keep disciplined stops below. This will allow you to capture the upside (if we Snap) and define your risk (if we melt)-and that's always a good thing.

Jammin' and jugglin' here so lemme hop and trade 'em up. If (big if) the tape is gonna turn, it should be led by the financials-so keep a close eye on Citigroup as a financial proxy.

Gotta hop.

R.P

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positions: sox, c
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