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Autumn Wind

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Its casual Friday in Minyanville and the colorful leaves have begun to fall in our humble little town. The critters, who've been working their crackers off, are psyched for the weekend and the opportunity to relax and recharge. Before they kick it, however, they know that 20% of the week and many important decisions remain. As such, they've double downed on the Dunkin Doughnuts and snuck in an extra cup of java as they prepare for today's expiration.

The first batch numbers are out with the Producer Price index coming in at 1.1% (.5% ex-food/energy) vs. expectations of .2% (.1%). Business Inventories were also higher and registered a reading of .5% vs. expectations of .2%. We'll get a few more economic schnitzels at 9:15 and then the WOLVERINES! number hits at 9:50. After that, all eyes will focus back towards our technical levels and the looming expiration.

I've always found that expiration does two things: exacerbates the volatility on the days preceding the actual expiry and, potentially, create magnets (pins) at certain strikes. With regards to the latter, I always look at the open interest (outstanding contracts) relative to the average daily volume (of the underlying) when looking through the haystack.

Walking through our technical playbook again, S&P 870-875 continues to be a good support zone. If they can power through 900 with any vigor, cast your eyes to S&P 925 (November highs) as the next level of contention. For the techs, NDX 1000 will act as support and NDX 1070 (November highs) will be the near term resistance.

The Banks and brokers (number cuts) will remain the traffic cop for the big board while the SOX will show us the way for the techs. Peripheral tells include our Generals (GE downgraded by JP Morgan), software (some Merrill downgrades), storage (been dry) and the retailers (consumer proxy). As always, we'll also be keeping our ear to the ground for gorillas and alligators (institutions and allocators), while keeping half an eye on Crude, the US Dollar and the internals.

It's another important day for the tape (aren't they all?) so splash some water on your face, crank up some Jimi and let's rock and roll to end this week. The only person that can stop you...is you.


See you after the opening, Fokker!

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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.

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.

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