Shallow Hal: The Bull-Bear Debate

By Todd Harrison  JAN 11, 2012 10:20 AM

Perception and reality collide as global investors get a grip.


“Who knows how long this will last; now we’ve come so far, so fast.” 
-- Don Henley

I'm back in the saddle following an off-site yesterday—no, I wasn't squatting for 24 tickets...yet—as the tape continued its march toward S&P 1360, which we targeted (through a pure technical lens) in December 2011.

The forward question is a simple one: Has the upside become too obvious (with the VXO again trading in the teens and the bulls coming out of the woodwork) or are fund managers so underinvested (after The Smartest Guys in the Room Screamed "GET OUT OF THE MARKET!") that pullbacks will be Shallow Hal consistent with the path of maximum frustration?

A few points of Parliamentary procedure, in no particular order:
With the S&P up 12% since the end of November 2011 (and 20% since the October 4, 2011 low), a fair share of the above bullets—bullish technical setup, a quieter Europe, economic validation and the electoral bid—is discounted; the questions we must wrestle with are "how much," and "what's next?"

Time and price are the qualifiers for that discussion and where you stand is a function of where you sit.  Through a stair-step (risk management) lens, however, Hoofy the Bull will argue that it's "game on" for the bulls as long as the S&P holds 1265 and the banks remain above BKX 40. 

Bank America (BAC), Deutche Bank (DB) and Goldman Sachs (GS), remain our financial tells while Apple (AAPL), Amazon (AMZN), Google (GOOG) are our beta reads. 

Random Thoughts:

Twitter: @todd_harrison

No positions in stocks mentioned.

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

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