Monday, February 27, 2006

Gut Feeling

Oil is heading lower this morning. Not calling a reversal here and not suggesting a trade just yet as I feel the near futures contract can move to 66 before reversing in a meaningful manner. If one is itching to do anything, then a long gamma stance in OIH may be sensible. At Cadence we aren't taking this sort of a position on right now as we don't see the odds we need.

Semiconductors also present an intersting picture with SMH looking ready to breakdown and separate issues such as TXN and LLTC drawing a perfect technical setup to get short. We aren't taking the plunge on this either as the overall market isn't providing a "get short tech" sort of context now. If anything, I'd look to fade any breakdown.

Overall, I have a feeling the market will move today. Yes, it's mostly a gut feeling, but often that's all we have going for us!



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