The Snow Plow
I can't seem to find traction on the icy slopes!
Going to plant a weeping willow
On the banks green edge it will grow grow grow
(The Grateful Dead)
I suppose it's fitting that the market is drifty during a snowy day in Minyanville and traders are chatting up our support levels. There are a few ways to approach this action and, at the risk of being redundant, at the risk of being redundant, it's totally dependant on your time horizon. Aggressive traders who are bullish may look to buy QQQ and SPY as we waffle around support and set "stops" underneath. By doing this, you're defining your risk while maintaining upside exposure. What is an appropriate stop level? That's dependent on your particular circumstances, cookie.
Conversely, if you're furry and bearish, you can add short exposure and key off our seminal "tells" in the financial and semiconductor space. If those sectors begin to get jiggy, you may want to take that signal and move to the sidelines OR go wider in your upside scales. There's no one answer as every trader has a unique style and individual methodology. For my part, I tend to incorporate "all of the above" as I trade around my short side thesis and dance with the Minx.
The N's over S's continues (NDX outperformance of S&P) the financial/retail duopoly continues to drip lower. Meanwhile, the SOX (semiconductors) hang tough after the 15% haircut (from the highs) and in front of Intel's mid-quarter update tonight. I've also begun to pick up chatter of alligator sightings (asset allocation) out of stocks into bonds and I wanted to pass it along but, other than that, the flow's quiet.
Taking a little snow day poll--what do you think was the funniest movie of all time? Send your responses to firstname.lastname@example.org and I'll let you know the results later today.
I hope this finds you well.
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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