The Quiet Storm
This range is bound to change!
The morning stories are pretty quiet as traders ready for the weekly freak. With everyone waiting tomorrow's Chambo, the next two sessions should be dominated by the ever-changing psychology and our technical backdrop. Keep half an eye on S&P 975 as it would confirm a triple bottom break (in point & figure work) and keep that right hand up.
The financials should continue to set the tone as they digest the rate debate in bondland. There are plenty of opinions regarding the inter-market relationship but regardless of your view, one thing is for certain. The rate of interest (as opposed to the interest rate) has risen significantly as the bonds got smoked. Quite simply, the pace and scope of the decline has surprised many players and served as a reminder of a potential downside blinder.
If you're bangin' with Boo, you may choose to lean against the S&P 50-day average (985) as a short side stop. If you're hangin' with Hoofs, S&P 975 is a viable stop for long exposure. Either way, map out a plan before you step on the field and understand that it's thin, whippy and fraught with two-sided risk. My humble opinion is that rallies are made to be sold but, as always, those are decisions you must make for yourself.
I'm gonna hop and get ready to rumble. Watch the banks, monitor the breadth, key on the semis and study the cyclicals. These are "put up or shut up" levels and when it's all said and done, one of our critters is bound to be bitter. Trade smart, maintain your discipline and, above all else, think positive--it all starts with you.
Hit 'em hard.
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 firstname.lastname@example.org.
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