|Todd Harrison: My Single Best Investment Idea for the Next Decade|
By Todd Harrison DEC 04, 2012 11:25 AM
Levels of lore for traders galore.
A sniff at the charts below -- and in particular, Apple and the NDX -- is a real-time visualization of the above-mentioned vibe, which at the time was forward-looking.
I'm not looking for a pat on the back (I’ve got a bad back; please be gentle); I'm just providing some context. In trading, as in life, we have a tendency to seek confirmation bias, which often vacillates as a function of price. In other words, it's easy to get bullish after a rally and bearish following a decline, but sure enough, that is the mirror image of what we must do to make cake in this tape.
Here's the rub: While I entered today's session with a handful of out-of-the money S&P February puts, I punted those puppies this morning for a push (flat trade). While this may again be premature evacuation, I found myself hoping for a decline yesterday, and that's typically a telltale sign that risk is misplaced.
For those of you with ursine inclinations, the above-mentioned levels provide a nice and tight defined risk, although I don't see much in the way of an edge (breadth is flat, among other tells).
As for me, I've got a smattering of lottery ticket cannabis plays (still my best idea for the next decade; it will add jobs, cut the crime rate, and increase tax revenue, plus it's not yet covered on Wall Street, so it is a sleeper industry). Please note that I am prohibited from mentioning specific stocks as many of them are extremely thin and I don't wish to be perceived as a "touter." If you like the space, please do your own work and understand that big gorillas such as Altria (NYSE:MO) and Archer Daniels (NYSE:ADM) will most certainly have a presence in this industry by the time the smoke clears -- or, should I say, when it begins to rise.
Directionally, with resistance ahead and the animal spirits in full force (performance anxiety is tough to game, other than to say the buyers are higher and the sellers are lower), I'm sitting on a slew of dry powder. As mentioned yesterday, 2012 -- while difficult in oh-so-many ways -- has been a solid year on a trading basis, and I'm playing lighter and tighter until Baby New Year comes knocking.
Good luck today, and quite hopefully, I'll see you this Friday at Festivus—I'll be the stag guy in a little coat! Click here to sign up, and share hugs and handshakes with the best and brightest in the Minyanville community as we do our part to give back to the kids impacted by Hurricane Sandy. The live music, delish BBQ, and solid networking? That's the gravy!
As always, I hope this finds you well.