Not the Archers!! The arrows cost money!!
One little problem that confronts you
Got a monkey on your back
Just one more fix, lord might do the trick
One hell of a price for you to get your kicks
The dust settles after the smoky open and the minx is starting to slip into her groove. While an initial rebuff from the upside snuff made sense (resistance is resistance), the tape got a tad trickier with an hour under our belt. Now it's time for the nitty gritty, where men are men and sheep are nervous. So ya wanna be a trader, cookie? Come with me for a swim in the muck.
With the jumpy action the last coupla days, alotta these charts have more gaps than a shopping mall. I happen to keep the S&P and NDX charts up throughout the day but I'd venture a guess that air pockets abound. The pullback from the opening heights started to alleviate the latest case of technical space but they're certainly still around. The question now becomes whether the true base (for a move higher) must be grounded without tiny bubbles.
Breadth, while still positive, has evened considerably and that, coupled with flat financials, is quelling the swell. The semis, as a group, hold their gains but my eyes keep floating towards Intel (INTC:NASD) for signs of chip slippage. The telecom tone isn't particularly impressive either (Nortel (NT:NYSE)) but the internets and cyclicals hold their gains. And, not to be forgotten, biotech continues its acne on the heels of further Biogen (BIIB:NASD) jig.
If you're not sure what to do, don't trade just for the sake of trading. The minx is in a relatively tight range (S&P 1150-1160) and will offer clues with a breach of either side. The bull case (Elmer accommodation, momentum, good fundie news) and bear chant (divergences, non-confirms, bloated bull camp) are fighting for the technical edge and there's gonna be alotta casualties on this one. Let's make sure that you're not one of 'em.
As always, I hope this finds you well.
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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