Two Leaders, One Buy

Micron and Arista took the same hit today. Only one held its trend line, and that was the whole trade.

So two of the market’s biggest leaders got hit on the same headline today, and one is a buy and the other is a pass. Same news, same red candle, opposite call.

The scare was China memory. Micron dropped 8 percent, Arista almost 6. Same event to anyone watching the tape. Not even close underneath.

Here is the only question I asked, before reading a word of the news: did the trend line hold? Micron lost its 50-day for the first time in months. It broke the line. Arista fell just as hard and closed still sitting on a rising 50-day. It held.

Same candle, opposite structure. So I counted. Every rare flush in a leader, decades of it, split into two piles: the ones that held the line, and the ones that broke it. The two piles do not behave the same. One quietly beats a normal day. The other gives you nothing

The pile that works is the one that held, which is Arista. So the famous name everyone wants to buy the dip on tonight is the pass, and the quiet one is the trade.