The Stock Market's Path of Maximum Frustration: What's Next?

By Todd Harrison  NOV 21, 2013 12:28 PM

Following the road signs to better performance.


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

The knee-jerk reaction following yesterday’s FOMC minutes was lower, and true to the path of maximum frustration, today's tape is trending higher (the first move after a Fed announcement is typically the false move). Market breadth is 2:1 positive, the banks are outperforming, cats and dogs are twerking, and Hoofy the Bull is about to step out for a pedicure.

Life is good in Matador City; somebody cue Joe Walsh!

The dip-buyers can afford to be patient given the defined risk nestled below (S&P (INDEXSP:.INX) 1775 and S&P 1730). Each and every time the bears felt like they had the bulls on the ropes, they got rope-a-doped with a sucker punch. Those who haven't been knocked out by now are tired at the least, and prone to caution this late in the fight.

And you wonder why.

Our trading tells (banks and beta) act well today so the only Cliff Branch for the bears is the overhead supply at S&P 1800 (likely pulled there by expiration; stops are set on the other side).  I don't have a horse in the directional race at present -- by choice, mind you -- as I'm content to watch the action, pick my spots, and otherwise keep loose grips on the handlebars.  Perhaps it's no coincidence that I haven't felt this relaxed in years.

Twenty-six and a half sessions left until Baby New Year wipes the trading slate clean, rewards the winners, and punishes the sinners. As it stands, anyone who has expressed an inkling of doubt this year, or feigned concern about the unintended consequences of Fed policy, or believed that the ramifications of social mood would manifest through the price action, or otherwise stressed about the "other side" of economic nirvana, will need to suck it up and scream, "Thank you sir, may I have another?!?!"  And that's OK, as long as you're still here to trade another day.

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

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