Thats my pie!
When are you gonna come down?
When are you going to land?
I should have stayed on the farm
I should have listened to my old man
The morning vibe has started to jibe as traders join the bovine tribe. There was a slight moment of indecision out of the gate but stronger economic numbers ushered in supposed alligators. I can't confirm that they're out there--they're shifty critters--but that's what I'm hearing. And the action in the corresponding markets support those craw prints.
Breadth is minty (2:1) and the financials are finally showing some signs of life. We spoke about the importance of this sector this morning and we gotta watch the piggies as they approach BKX 98 (from where they broke). I'm paying particular attention to Citigroup (C:NYSE) as it is the sector in a nutshell (twisty stochastics vs. rate-worry headwinds).
We're quickly approaching some serious levels (S&P 1050/NDX 1500) and thy trading antennae should be hummin'. It's S's over N's thus far (which 'fits' the alligator tracks) and that flow is coupled with short covering in the futures (yesterday's sellers). We've also got the GDP on Thursday (economic catalyst) and there is sure to be posturing as we edge closer to the release.
As discussed yesterday, I bought some cheapie calls in tech and have added similar exposure in the financials (part trade/part hedge). I'm quite aware that we're at resistance (until proven otherwise) which is why I've chosen the instruments that I have. It's a clear dance between some troubled elephants but a defined risk profile allows for these type of schnitzels. And, as always, this is particular to my individual risk profile and is in no way intended as advice.
I'll be back.
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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