Slaloms and Moguls
You want banks, Hoofy? I'll give you Banks!
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.
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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