Todd Harrison: Critical Market Levels in a Snowstorm

By Todd Harrison  FEB 13, 2014 12:53 PM

The rally approaches fish-or-cut-bait levels.

 


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

The kids are psyched: For them, snow days mean a break from school, hanging with their friends, and doing the things children do in the snow. I can hear their laughter in the distance, an innocent nonchalance that while precious, seems to dissipate with age.

Those of us with the benefit of experience understand there are two sides to the snow.

For all the beauty, there are icy roads and the bitter cold. For all the missed meetings and canceled appointments, there is additional work stacked up on the other side.

While mass transit is a snarl and commutes are in flux -- apropos during Mercury retrograde -- the stock market loathes unanticipated respites. And much like this wintry weather, there are two sides to this tape.

This brings us to today, February 13, 2014; yet another important session in this young year.

Last night, while watching the thrilling finish to the Syracuse-Pitt basketball game, the overnight price action began to sag. S&P (INDEXSP:.INX) futures were off eight handles, and the Nikkei (INDEXNIKKEI:NI225) was taking a break to the downside.

I half-jokingly tweeted, "BREAKING NEWS: Tomorrow's Stock Market Rally Canceled Due to WEATHER."

This morning, retail sales missed by a mile -- the worst year-over-year reading since 2009 -- and jobless claims were higher than expected. Stocks, as you might expect, opened in the hole.

That's when Pavlov released his hounds.

The knee-jerk response to lower prices, a reflexive action that has been conditioned after five years of being rewarded to do so, is to close your eyes and buy them, and that's just what traders (and their black boxes) did.

One might offer that was the easy trade; time will tell. In the meantime, I'll offer up these Random Thoughts:
R.P.

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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