I have Ripples, Greg!
The tale of two tapes continues!
Reach out your hand if your cup be empty
If your cup is full may it be again
Let it be known there is a fountain
That was not made by the hands of man
The wiggles and giggles continue as another Minxy Monday migrates through our daily dance. Fokker and I have been keeping ourselves busy today as we rip through a laundry list of potential longs and shorts. There's are a ton of crosscurrents and it's always good to have the playbook updated in the event that an audible is needed. The last thing you wanna do if the tide shifts is search for vehicles with which to play.
The N's over S's theme continues and the jiggy SOX has buoyed the overall tape. As discussed, this market has more breakouts than a high school prom but that, in and of itself, is no guarantee of results. It surely helps to shape our trading metrics (both technical and psychological) but any if there wasn't risk, it'd be called winning, not trading. In other words, it's a positive input--but it's not an "all clear." A'ight?
3M (MMM:NYSE) and Boeing (BA:NYSE) have dragged on the Dow all day and that hasn't helped the DIA 86 breakout situation. Again, with the stochastics SO twisty, any upside technical signal has to be taken with a grain of salt. That's not to say we won't see a final blowoff phase (we still can), it just complicates an already complicated situation in terms of field position.
In that vein, watch BKX 800 as a psychological key and S&P 935 as an area that a lot of traders are keying on. The breadth is constructive but there ARE downside caveats out there--3M, Microsoft (MSFT:Nasdaq), IBM (IBM:NYSE), Boeing and the dollar all trade lethargic. In addition, with Cisco (CSCO:Nasdaq) and Elmer looming, there's always the "hey we've logged some nice gains, let's lock some in" potential.
I wish I had something juicy for you but it's dicey in here. I'm two sided and playing primarily through options. This defines my risk (both ways) and allows me to play the gamma at these levels of volatility. Exciting? Nah. But it's still early and I'm waiting to pounce.
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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