More Then Just CSCO

As I said last night, something doesn't feel right and although the CSCO news was bound to have an effect on the market, I believe we are seeing more then just the CSCO effect. Harbinger Hedge Fund, if you haven't already read, is getting hit with redemptions and they probably aren't the only one.

In my experience with back testing strategies, it is very difficult to outperform a well performing market as we have seen in the last two months. The real advantage you have in backtesting and trading is that you are also able to add to your gains going short the market when it dips, this is the essence of a hedge fund as compared to a mutual fund.  So the story about Harbinger being hit with redemptions from the likes of GS, BlackStone and the NY Pension Fund all pulling out, there's going to be a lot of unwinding of positions to meet these redemptions. This may also be a factor (along with hundreds of other funds) in today's market activity.

Note that today so far, all of the usual suspects are down, AAPL, NFLX, AMZN, PCLN, as well as GLD and SLV.

Note that the GLD and SLV divergences at the close with the ascending wedges that I mentioned last night, both played out this morning. Still, be on alert for head fakes there.

The Foreclosures are bubbling up again, this time hitting the earning potential of Home Depot and other home makeover or appliance corporations. In fact, there's quite a lot of not so hot news out this a.m. as well as the dollar looking to me as if it may have just pierced the resistance level I mentioned last night in the second FX chart.

So now it's time to watch 3C and see what's what in these names. I'll update again shortly.