Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
With the stock market continuing higher—we touched on our current field position yesterday
—I wanted to offer some historical perspective.
In some ways, this juncture feels very much feels like 2003
, while in others, it reminds me of 1987 (minus the March to May consolidation).
I've included the 1987 S&P
(INDEXSP:.INX) chart below, as well as the year-to-date 2013 chart, for comparison. Two items stand out; first, you will note that in '87, the S&P was up 22% on May 7 (vs. 14% today) and second, in 1987, the S&P rallied an additional
14% before getting tagged for a 36% three-month descent (which, at the time, took the S&P to a 10% loss on the year).
We can do with this information what we wish, but it does provide some perspective: Market moves can last a lot longer than an individual can remain liquid, and of course, timing is everything.
Hands over eyes, the bulls can do no wrong, but as always, two-sided risk remains and we would be wise to define our exposure through a stair-step lens. As it stands, and consistent with what we discussed earlier,
S&P 1560-1680—or, 1590-1640, if you want a tighter market—is the zone; Mr. Valentine has set the price.
As always, I hope this finds you well.
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 firstname.lastname@example.org.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.