The rock of Gilbraltar is now the cause of the falter.
"I'm feelin gooder than good,
If you wouldn't I would
If you could, I know you would
She's kickin' back in the hood"
(LL Cool J)
The morning fray is underway as the chips got flipped and the bears got paid. While Boo's crips have staked a claim to downside fame, I told our furry friend to stay on his paws. There's a whole heckuva lotta crosscurrents out there today--and expiration tomorrow--so the potential for movement is there. We've just gotta filter the noise and keep our poise as we find our way.
The tape "felt" ok in the first half hour but as is often the case, a truer tenor emerged at 10am. That's when the semis broke that all-important SOX 500 level and led the dread into the red. The old school is actually outperforming despite the best, er, worst efforts of the financials. Citigroup (C:NYSE)--drawn to $50 on a pin--led the piggies to slaughter. That makes 50 handles (old way) in three sessions and if Sandy can't hold strike, we might be eatin' ham sandwiches for lunch.
The rule of thumb is that when the banks and semis both point the same way, the rest of the tape usually plays. With all the sector (and asset class) rotation in play, however, it gets stickier and trickier as we edge ahead. Retail trades dry, energy is fly, the drugs are high and the cyclicals all try. To top it off, NYSE breadth is positive still, lending hope to the bulls that the train to Terrapin Station will soon arrive.
I think "meatier" downside is in our midst but I'm not as confident that it's today's business. If Citigroup can stabilize, the tape may be alright through tomorrow's expiration. I'm probably not alone in that thinking but it makes sense that the Minx will wanna eat the front month protection before (if) she flies south. That's the nature of the beast, my friends, as the market typically travels the path of maximum frustration. Most of my paper is "out months" so I don't have to make that distinction (yet).
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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