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March 10, 2006


An unremarkable day closed with equities higher to the tune of about three-quarters of a percent. Tech stocks lagged the broader measures with the NDX up only 3 points. The jobs data released this morning appeared to me to be mostly a non-event. While stocks rallied on the heels of the release, the gains were of rather small magnitude and could be attributed to technical relief just as easily as to relief that the number was not horrible.

As an interesting side note, former market superstars Apple and Google were both down a percent. I've previously commented about how the stocks that lead a market up are usually the ones that lead it down. The charts of GOOG and AAPL are in full breakdown mode, a fact any prudent trader should be well aware of.

Martin Goldberg's latest article on makes a similar point about leading sectors. His posts are littered with insightful tidbits, both technical and fundamental, and I encourage everyone to read him. In his latest post, Martin discusses how it would be difficult, but not impossible, to see the market moving significantly higher without the participation of Internet and semiconductor sectors, both of which are in failing patterns. He goes on to discuss the psychological environment and how people's attitudes have been set them up to be blindsided by any major market swoon... a perfect environment for such a swoon to occur.

Newmont Mining shareholders were happy to see the stock bounce today in light of a one percent drop in gold's price. I am reticent to leap in at this point to build the position I have discussed. Being too early on the decision to open a position makes one prefer to be too late in adding to it. Besides, today's bounce could easily be a market bluff to draw in anxious players on the long side. I was not as demanding of the technicals as I should have been on my opening purchase, but I will be quite picky in choosing a spot to add.

Disclosure: Long NEM; Long NEM Calls


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