Random Thoughts: Where the Bears Are!

By Todd Harrison  OCT 11, 2012 9:50 AM

Technical levels of lore for markets galore.



Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

The early morning price action is pointing higher, and that's putting some pep in the bovine step.

The bulls will argue that the recent slippage was a “pause to refresh” before they ramp stocks higher into year-end and they may be right—despite the October fright, the Nasdaq (INDEXNASDAQ:.IXIC), S&P 500 (INDEXSP:.INX), and Dow Jones Industrial Average (INDEXDJX:.DJI) are up 17%, 14% and 9% respectively and performance anxiety remains palpable for those with feet on the street.

I will note, however, that Technical Analysis 101 dictates the best time to initiate a position is on a retest of a breakdown (our breakout, as the case may be).  Given the S&P "broke" below 1450 and the NDX "triggered" below 2770, as previewed last week, these are levels of lore as we open the front door.

I would add Apple (NASDAQ:AAPL) $650 to that list as well. The bears finally broke the most important stock in the world—which “works” to $600ish in a technical vacuum—and they'll defend that level with all they've got. The reaction to the traction will tell us a lot, so keep your eyes peeled and your thoughts clear as we edge into this Thirsty Thursday!

Random Thoughts:

Twitter: @todd_harrison

Position in RIMM

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 todd@minyanville.com.

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