Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Keep the Change!


Lets get carvin'!


Turn and face the strain
Don't want to be a richer man

(David Bowie)

A wise man once said that the more things change, the more they stay the same. I don't know if it was the same sage who offered that what goes around comes around, but the circles certainly overlap. An undeniable sense of deja vu is gripping Wall Street these days as traders discount the likelihood of a year-end rally. If we see some repeat performance anxiety, it'll be sweet redemption for those who took the leap of faith. If the path of maximum frustration leads through Red Dye, it'll serve as a painful reminder that hope isn't a viable investment vehicle.

Hoofy will argue that an accomodative policy and the collective psychology has combined to create powerful upside momentum. Selling pressure has been unmotivated at best and absent at worst, producing a path of least resistance that belies the benchmark. With an electoral rally that has irradicated technical resistance levels, an optimistic eye would offer that the averages are consolidating in an orderly and refreshing manner. Give them a week, he'll offer, and they'll take out your knees.

The bears are grasping at macro-oriented straws and heaving them after a camel that has already bolted from the gate. There is a fine line between riding the tide and using price to your advantage, however, and sentiment is ripe for a back-handed smack. The question facing portfolio managers is one of degree and acceptance. Many have carved out marginal gains and their decision whether to press the bet or lock in their year will shape the tape into the holiday season.

The recent action has produced a stealth technical pattern that may offer clues in the muck. Since October 28th, both the S&P and NDX have held a steady uptrend of "higher lows." The action of the last few sessions has provided a fresh spate of "lower highs." Voila! We now have a near-term pennant formation and a breach (either way) will likely impact the near-term price action. Toss in a relatively tight band for the piggies (BKX 100-BKX 101.80) and we're able to walk our journey one step at a time.

Peripheral influences include the dollar, which has broken to fresh nine-year lows this morning. The attendant action in the fixed income market bears watching as softness will usher in fresh speculation that foreigners are dumping our debt. It's an admitted extrapolation but perception is reality, particularly against a backdrop of reactive rationalization. Breadth and crude also remain on the radar, as does the action in the nets (note the Google (GOOG:NASD) gap).

With traders casting a watery mouth towards Thanksgiving, the ranks will surely thin as our waists do anything but. That introduces the specter of low volume and, henceforth, higher volatility. This is the time of year to appreciate our good fortune and focus our energy on family and friends. Be smart about how you position your risk and remember that discipline is a part of any balanced financial diet. And please remember, bulls and bears make money and turkeys get slaughtered!

Good luck today.

< Previous
  • 1
Next >
No positions in stocks mentioned.

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

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.

Featured Videos