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Slaloms and Moguls

By

You want banks, Hoofy? I'll give you Banks!

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Another day races out of the gates and the initial move is a "fade" (read: sell) off the opening spike. Generally, when a market opens in the opposite direction of the previous trend, it will fade at least once (barring news). In other words, the market's been heavy the last three days and it's intuitive that traders probe the downside before (and if) a rally can occur. A friend of mine once opined that there's one "easy" trade each day and that was likely it.

The first thing that jumped out and bit me today was the role reversal in the marketplace. Yesterday the S&P outperformed the Nazz all day and today the S's are lagging their four-lettered cousins. The lethargy in the retail group and the relative slippage in the financials are the chief culprits, but select industrial names are also to blame. A check of the morning breadth shows losers beating winners 3:2 with a slightly better tone in OTC land.

Keep an eye on our levels as there are "sell stops" below 910 in the S&P. NDX 1070 is also big (see this morning's first post) and they're "doing work" around there now. After three days of selling and short term oversold readings, it will be interesting to see if the Minx has the gumption to pierce support. Stay tight and on your toes, my friends, there are ice patches everywhere.

Be back.
positions in qqq, spx

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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