The suck and duck, baby!
The Minx meandered out of the gate, kissed our initial support levels and has now entered a state of flux. As we wade into the day, I'm weighing the "they trade pretty dry" vibe against "the first rally is intuitive (after the recent jig)" vibe. While the dollar remains under pressure (down 1%), traders (thus far) seem reticent to make a downside bet. That mindset circles back to our "buy the dip" conversation and its ability to work -- until it doesn't.
I continue to watch the financials like a hawk and while the money centers are sticky, the brokers are a tad sloppier. It's certainly nothing egregious (yet) but I like to use this complex as a proxy for the sentiment/health of the overall tape. Meanwhile, pharma trades dry, retail is showing signs of life and defense is on the offensive.
I've got six-day charts up across the indices and they've all formed pennants (lower highs, higher lows). These aren't to be confused with the longer term flags we discussed earlier but, for the near-term horizon types out there, shorter dated charts are more applicable. A quick check of the morning breadth, meanwhile, shows losers marginally beating winners in both the N's and S's.
Is this the "suck in sell-off" before the much anticipated breakout? Or is the very promise of higher prices (and a reticence to sell) bearish in and of itself? These are the thoughts fluttering back and forth behind my eyelids and as I can "see" both sides, I'm trading a little bit "in-between" around my downside gamma.
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 email@example.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.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter