Itch and Scratch
The morning Minx has sprouted some green seeds and as she tickles S&P 935, traders are weighing the early action. The tone, by and large, is constructive -- the internals are stronger than a mule's breath and the financials trade firm (thus far). Still, there are interesting signs the other way. 3M (MMM:NYSE) continues to trade heavy, the semis are (relatively) soft and (yawn) the dollar is weaker. It's VERY early, Minyans, and we've got a lot of trading left in the session (and beyond). Stay on your toes.
I'm admittedly torn on whether we need one more blow off rally before the short side trade comes into focus. As such, I'm playing a little "in between" (hence the single appendage add) and attempting to exhibit patience. A move through S&P 935 will likely trigger stops, and that fact isn't lost on either the bulls or bears. We saw supply enter the market yesterday at that level and it remains to be seen if that'll be the case today.
The path of maximum frustration is likely a confirmed breakout before failing but, again, the warning signs are already "flashing." What you must do -- what WE must do -- is identify an actionable time frame with which to trade. That's often my biggest obstacle when writing this column -- Minyans come in all shapes and sizes -- but I'll do my best to illustrate what I'm thinking (for better or for worse).
My eyes are fluttering between Citigroup (C:NYSE), Home Depot (HD:NYSE) (off an upgrade), Wal-Mart (WMT:NYSE), 3M, KLA-Tencor (KLAC:Nasdaq), IBM (IBM:NYSE), Cisco (CSCO:Nasdaq), the breadth, the dollar, our levels, and Fokker. Oops, I'm not allowed to talk about Fokker anymore -- he's become quite sensitive in his old age!
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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