Strategy is a strength and not disaster
"He hates these cans! Stay away from the cans!"
--Navin R. Johnson
The downside test is underway and traders everywhere are warily eyeing a pop quiz. Indeed, this morning's sickness dragged the Minx to the brink of breakout support. With the XBD (brokers), BKX (banks) and SOX (semis) all loggin' double-digit fits and the breadth smellin' worse than a mouse fart, that whiff you hear is one of fear.
There are a lot of crosscurrents floating around today's tape. As I just discussed with Minyan Fleck, "it" is out there but "it" won't matter until the collective psyche evolves its focus. Is it really a shocker that mortgage lenders are in a pinch? Not really--we've been discussing the rate ramifications since the June swoon. Alas, timing is everything and the only determinant of what really matters is the almighty Minx. It is, by all accounts, the worlds largest thermometer.
So here we are. The semis are down 3%, the financials are being clipped for a deuce and the rotation into the consumer names is in full swing. Sounds easy, right? Not so fast, flash--textbook technical analysis dictates that the time to buy a stock (market) is on the subsequent retest after a breakout. With the current tickle of S&P 1015, we're almost at that exact point. It looks like this is where the rubber meets the duck.
My big picture bearish rant is old hat by now so I'm not gonna be redundant. My big picture bearish rant is old hat by now so I'm not gonna be redundant. I will simply offer that we are sitting on some serious support and a little fear may prove to be healthy. However, with sentiment so complacent, everyone and their sister looking to buy dips and the bull camp uber-crowded, "it" could happen at any time.
The bullish elements today? Traction in General Electric (GE:NYSE), Cisco (CSCO:NASD) and the retailers. I'm not sure if that'll be enough to turn the tide from the crimson ride but if (big if) Snapper makes a cameo, those are likely the names that will outperform.
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