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Random Thoughts: Tiptoeing Towards Resistance!

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The tape approaches S&P 950.

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  • Much has been made about the recent rise in Treasury yields as an alternative investment option and potential headwind for equities. Seeing both sides, we must respect the attendant appetite for corporate credit (resulting in lower yields) as the summer heat thaws that space.

  • It looks like someone is playing the other side of our long watched Wishbone World.

  • My vacation reading material? Man's Search for Meaning by Viktor Frankl, which I highly recommend.

  • As the S&P extends into the meat of our aforementioned and long-watched resistance zone, it's worth noting that the financials (including Goldman Sachs (GS), JPMorgan (JPM), Wells Fargo (WFC) and Citigroup (C)) are struggling to find their way.

  • I don't do whippets but I would imagine they feel something like trying to equalize while you've got an ear infection. Seriously, crank up some Jerry, toss me a tie-dye and grab my Birkenstocks. This is trippy, dude.

  • While I'm playing smaller (knowing thyself, it typically takes me a few days to establish a rhythm), I've nibbled on some downside exposure in the S&P and Amazon (AMZN). Entry levels are "around" 940 and $81, respectively, and my vehicles are October paper for pure trades.

  • The risk for Boo and his bearish crew is that we've entered the final phase of denial-migration-panic as investors weigh corporate credit improvement and their underweight posture. I wouldn't know about being underweight but I know enough to manage risk rather than chase reward.

  • That baby monkey you saw in my opener is named Ollie and I miss him already. I'm tellin' ya, he and I could do some damage in the big city.

  • Trade to win. Never trade "not to lose."

  • As discussed this morning, a sharply higher Monday that takes the tape straight to S&P 950ish into Turnaround Tuesday is seemingly a spot for Boo to lick his paws. It might prove too easy but those ducks are starting to align.

  • I learned in 2003 that nobody is smarter than the market and I carry that lesson with me daily. That is why the mechanics of the swing always trump the results of the at-bat.

  • Over in Tea Leaves R' Us, breadth is 9:1 positive and beta holds a bid but the banks, while near session highs, continue to trade with distinct lethargy. And I'm watching the dollar, for we know that while a grubby greenback is no guarantor of higher asset class prices, it's a necessary precursor to them.

  • It's nice to be included behind the red velvet ropes of the DJIA but from a pure supply-demand standpoint, indexers won't need to buy all that much. Something to keep in mind.

  • Rugs are meant to be cut! NYC area Minyans be advised that we'll be gathering in force this Thursday at The Red Lion at 9PM to celebrate MV CMO Charlie Mangano's and MV COO Tom Eggers dual birthdays. Feel free to swing by but be forewarned--with all those candles, we may have a fire hazard!


R.P.

Positions in SPX, AMZN

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.

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