The multinationals should provide a sentiment proxy for the lower dollar.
Broken bottles under children's feet
Bodies strewn across the dead end street
But I won't heed the battle call
It puts my back up, puts my back up against the wall
A sloppy opening greets our minxy Monday and the gap lower immediately probes the first support zone. S&P 1020 (NDX 1365) have thus far held and, as long as they do, there will be a "successful retest" camp looking to buy dips. It's the very definition of a double edged sword--there is an upside agenda in front of quarter-end and PM's will attempt to "make themselves right." That'll work until it doesn't--but if it doesn't, there will be a lot of trapped bulls luggin' exposure.
Morning breadth is absolutely nasty and it'll need some serious toothpaste to improve. My eyes are fixated on the financials for signs of slippage/traction. Please keep in mind that Goldman (GS:NYSE), Morgan (MWD:NYSE) and Lehman (LEH:NYSE) all report tomorrow and there's bound to be posturing ahead of those events. Still, after the run they've had, I would think that pretty good numbers are baked into that cake.
In four-letter land, watch Cisco (CSCO:NASD), Microsoft (MSFT:NASD) and the semicaps for guidance. As a broader brush, gold (shining, but off its highs), the dollar (fugly, but off its lows) and Europe (blimy!) should help paint the macro picture. It's early, my friends, and there's a lot of trading left in the day, week, month and year. Tread carefully.
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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