Neal Page and Del Griffith popped into Minyanville to offer me a little advice on my trading journal. "You know...you know when you're telling these little stories, Toddo? Here's a good idea: have a point! It makes it entirely more interesting for the reader!" Hey guys, I understand that the tape may be going the wrong way, but take a deep breath and relax. Emotion remains the enemy when trading.
The pivot point that is S&P 800 continues to be a focus as traders seem to be using that level as a "stop" both ways. For trading neophytes, a "stop" is a predetermined price point where you unwind your risk. In other words, if you're bullish on Gekmo, Inc. (trading at 52) and want to define your risk, you can set a 50 "sell stop" on your position. If Gekmo, Inc ticks at 50, a market order to sell your long position would be triggered. Conversely, if you're bearish on Gekmo, Inc, and short the stock, you could set a "buy stop" at 55. If the stock trades at 55, a market order to cover your short would be triggered. Many traders, particularly technicians, set stops in the marketplace as a function of seminal technical levels. That's typically while you'll see "gaps" when pivot points are hit.
Back in the tape, the financials continue to drip and they're pulling the broader tape down with them. The Nazz seems to be holding up better than the S&P (N's over S's), and that's purely a function of the "relative" dryness in the Semiconductor space. Look at it this way, the banks are to the S&P what the Semi's are to the Nazz. I don't know if people follow these tells because they work or if they work because people follow them, but in this random World, we'll take any clues we can find!
Walking through our sector bases, energy has a firmer tone and some safety seekers seem to be migrating towards pharma and soft goods. Other than that, it's more of the same....and the twelve hairs I have left on the back of my neck continue to stand at attention.
Oh guys, one more thing...THOSE AREN'T PILLOWS!
Hope this finds you well and trading within your means.
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 email@example.com.
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