The Press Guess
One way to play is to look for relative longs in the industrials vs. extended shorts in tech
The Minx springs to life and the dominant theme early is the flow. I've seen more than 3 million QQQ for sale out of the gate by macro hedge funds. There's two ways to view this: it's either indicative of a much larger picture on the sell side or the Minx is digesting the supply (constructive). Regardless, please know that these orders are floating around.
The other story this morning is the rotation thesis. I've spoken to multiple traders who believe the cyclicals are the place to be and that could lend to an S's over N's environment. It makes sense from a relative performance standpoint--the Nazz has massively outperformed this year and portfolio managers may look to rotate into less extended groups.
Early breadth is a bit stinky, with losers outpacing winners 3:2 across the board. The homies, internets, defense and metals are acting relatively firm while the drugs (Merck (MRK:NYSE), software (Checkpoint software (CHKP:NASD)), and semis are lagging. Meanwhile, NDX 1250 is (barely) holding, the bonds are slippy and Fokker has a "cat that ate the canary" look going.
Watch General Electric (GE:NYSE), the brokers, the semis and the internals as we edge our way through today's muck. Also, keep in mind that the last few post expiration weeks have been accompanied by equity hangovers.
I'm jammin' a bit so lemme hop...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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