Investors Ready for the Stock Market Holiday Drive

By Todd Harrison  DEC 02, 2013 12:35 PM

Has the downside comeuppance been pushed into 2014?


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

That loud, collective sigh you hear is the sound of the Street sliding back into its turret for the home stretch of 2013.  After the long "Thanksgivvukah" weekend, one that appealed to football fans and foodies alike, it's time to hunker down for the final 20 sessions of the year.

Apropos of the Morgan Stanley (NYSE:MS) note this morning -- "The only thing people are worried about is that no one is worried about anything. That isn't a real worry..."  -- the conditioned complacency continues to continue on the corners of Wall and Broad.  

The Dow Jones Industrial Average (INDEXDJX:.DJI) is up 23%, the S&P 500 (INDEXSP:.INX) is up 27%, and the tech-heavy Nasdaq (INDEXNASDAQ:.IXIC) is 34% higher on the year. At this point, there are two camps: those who are participating (and counting the days until they get paid) and those who are underperforming (and looking for opportunities to play ketchup).

Just as markets that are strong all day (with 2:1 positive breadth) tend to end that way, tapes that are strong all year (with similar internal readings) are apt to finish with some moxie.  Nothing is guaranteed of course -- the path of maximum frustration, coupled with the tendancy of news to be "best" at tops, introduces the potential for a trapdoor to be nestled somewhere within the next three weeks -- but if there wasn't risk, it would be called "winning," not "trading."

Looking out to 2014, I can’t shake the sense there will be a harsh downside comeuppance in the first quarter, potentially in February.  The missing link, at least thus far, is the catalyst, although it could be a ratchet higher in rates despite the best efforts of the Federal Reserve to keep them artificially low. 

Given the fact that the most important market metric is psychology, it will be interesting to watch the reaction of the masses when the perceived omnipotence of policymakers is called into question.

That and $2.50 will get you on the subway, I know, but file it away for a rainy 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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