I'm blowin' some bad breadth your way!
Blue, blue windows behind the stars
Yellow moon on the rise
Big birds flying across the sky
Throwing shadows on our eyes.
The morning fray begins to sway as we mold the clay into our day. The initial weakness was to be expected (with Cisco (CSCO:NASD) down 6%) but the saucier question remains: what now? There's a whole heckuva lotta crosscurrents blowin' through the 'Ville so let's dive in among the fins.
A few themes jump off the screen and scream for attention. The semis are testing the turtles at SOX 500 and lotsa folks are watchin' this for clues. The chips have dipped below their 50-day moving average and with the stochastics tickling the bottom of my page, something's gonna give (either way). The NDX, for its part, is sitting directly on its 50-day and that's all that technically stands between here and NDX 1450.
The retailers--flagged yesterday as a crowded mall--act relatively well, as do the consumers, internets, drugs and oil service (think rotation). The breadth is horrid--watch this!-and despite stronger than expected economic numbers, traders are choosing to focus on Cisco and, maybe, the specter of political uncertainty.
On the macro front, gold continues to act lethargic, as do gold issues (on the heels of Newmont (NEM:NYSE) earnings). Crude is tacking on another percent (worth a mention), Europe is surprisingly sticky (FTSE is flat) and Fokker is studying the sushi menu in preperation for his shining moment.
One a side bar, I just reminded a trading brother of mine not to get emotionally attached to his positions. As an objective observer, I noticed that he was rationalizing and defending his posture to me--and maybe even to himself. A good trader makes money but a great trader knows how to take a loss. If unsure, trade "in between" or take a step back and tighten the risk profile. The market will be open for business tomorrow.
Gun to head? Unless the breadth gets better, Hoofy will have his hands, er, hoofs full. Also, so ya know, I've got a massive lunch meeting today and, as always, I'll do my very best to keep the flow goin'.
Jammin' and jugglin'...lemme hop.
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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