Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
It's Valentine's Day in the city of critters and you know what that means on Wall Street—absolutely nothing! In fact, the love-fest for financial markets has been extremely one-sided this year—hugs and kisses in Matador City—as the bears seek therapy to help them cope with their abandonment issues. Love is blind, as is optimism at times.
Yesterday we shared a factoid that was worthy of a nose-scrunch: 2003—a path that many predict will play through a decade later—seems to be on track thus far. Back then, the S&P rallied 7% in January, took a swift 15% kick in the teeth, and then lifted 40% (not a typo) into year-end. Yesterday, on the opening pop, the YTD gain in the S&P was— yep, you guessed it—7%, before the tape drifted lower into the close.
Mark Twain famously said,
“If you tell the truth, you don't have to remember anything.”
"History doesn't always repeat, but it sometimes rhymes." As discussed yesterday as a follow-up to The Market Is Coiled--Which Way Will it Break?,
the bulls currently have two feathers in their cap. The first is the price action, which is still stronger than a mule's breath, and the second is the NDX, which remains in a solid basing
(above support) rather than a bearish churn
Click to enlarge
I have not yet been stopped out of my S&P puts, which is either a blessing (if the tape trades lower) or a curse (the recent grind higher dinged my P&L, both directionally and through the steady drip of theta
). I've been asking myself if I’m in hope mode—I was thisclose
to getting stopped out yesterday morning—but it was not to be, at least not yet.
A thin line separates patience and stubbornness—it's called the bottom line—and as the market writes the script, Minyanville will tell the story.
If and when BlackBerry (NASDAQ:BBRY) trades back to $12, it likely won't feel "right" to buy it. That's your call, of course, but that level does provide a nice and tight defined risk for those who wanna get involved (it's the 50% retracement of the move from $6 to $18).
The financials continue to bend, but they've yet to break. While BKX 52 is meaningful support, a breach of BKX 54.5 (give or take) would violate the recent trendline, so we should monitor that zone in kind (per the chart below).
Click to enlarge
Facebook (NASDAQ:FB)—another of our favored trading vehicles—is hugging the $28 level like my daughter Ruby hugs her Lamby. You can trade this both ways with that level as a technical toggle; I don't have a position at present, but my gut is that the next move is into the low to mid-20s.
Click to enlarge
Should we (gasp!) trade lower, I'll look to take some profits and/or roll down my risk on the aforementioned S&P bet. If this tape rallies back through my trigger, I'll move to the sidelines and look to re-initiate market exposure up around S&P 1575 (and trade "situations" between here and there).
Gold is quietly slipping lower, although it's thus far holding yesterday's intraday low at 1639.50. On a closing basis (read: if we close here), it would be the lowest level since last summer.
On a housekeeping note, I will be out of the office this afternoon. I could lie and say I have back-to-back-to-back business meetings (that was yesterday), but that's never been my thing. My Valentine's Day agenda includes taking my wife to a special lunch with Dr. Ruth (courtesy of YPO) followed by a much-needed "un-plug." A friend of ours got us a gift certificate for a NYC hotel when we got married—great gift!—and we're gonna put it to use. As we were forced to skip our honeymoon over the holidays, we'll embrace this abbreviated respite, if only for a night.
Good luck today.
Disclosure: Minyanville has a business relationship with BlackBerry.
Position in SPX.
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 firstname.lastname@example.org.
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