Random Thoughts: Volatility Rocks the Markets

By Todd Harrison  APR 17, 2013 11:53 AM

What to watch for, and when.


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

I'm learning to fly, but I ain't got wings. Coming down is the hardest thing.
-- Tom Petty

It’s Hump Day in Gotham and you know what that means—we’re halfway home on the weekly trek toward our requisite respite. With earnings coming fast and furious, and market volatility picking up in kind, there’s no rest for the weary, at least not yet.

The way I see it, the series of "lower highs" (a sign of distribution) remains intact under S&P (INDEXSP:.INX) 1570.  You will also remember S&P 1580 from previous missives—The S&P Alley-Oops—and that remains critical through a longer-term lens. Technical resistance is now tranched between S&P 1570-1610, so where you stand is a function of where you sit (as it pertains to your time horizon, risk profile, and stylistic approach).

Of course, nestled within our forward probability spectrum is the potential that bad news will continue to get shrugged off; for all I know, that could have been the sell-off, all 2.82% of it, peak-to-trough (consistent with Camp 2 discussed yesterday). 

I don't believe that will prove true—remember, there are three phases of leave—but if we're to practice what we preach, discipline must always trump conviction and we should always see both sides as we continue to find our way.

Random Thoughts:

Twitter: @todd_harrison

Position in SPY.

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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