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The Inevitable Occupation of Wall Street

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The signs were there for all to see.

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A few years ago, I shared that my most lucid thought was to escape from New York.

It's wasn't, and still isn't, about me-I can take care of myself (225 pounds and all)-it's about the little ones, who continue to ask why people in the city are so angry these days.

One of our kids goes to school across the street from the NYSE and we held him back today-with tens of thousands of protestors swarming that block, the worth-it-meter was a definitive NO.

Let's hope for a peaceful protest, at least for today; bigger-picture, the needle continues to point in a most unfortunate direction.

We flagged the percolating problems for the "1%" back in 2005. "As this dichotomy manifests," we said while mingling in the mountains, "the implications for consumer spending, real-estate investment and long-term savings will be profoundly impacted."

The following year in Vail, we touched on the growing chasm between the "haves vs. the have not's," deterioration of the middle class, the devolving societal fabric, the growing trend of nationalization, and the probabilities of entering a recession "entirely more depressing than a recession."

This is NOT a victory lap; it's some necessary context that this movement has arrived on cue and very much according to plan. The future is still ours-we simply need to find common ground, proactive purpose, and calmer heads before the wheels fall off the wagon entirely.

I don't profess to have a simple solution-I don't believe there is one-but we can certainly take steps to come together before we break apart. We need a forum for discussion, mediation between classes and a solution set that provides a positive path, or even a first step.

Make no mistake, it could get worse-a lot worse-but it's not too late. We've said for years that in order to get through this, we needed to go through this. The future is ours and it starts today.

Random Thoughts:
  • If there was a stress-per-percent gauge in the market, today-and this year, for that matter-might be trading at an all-time high.
  • Its borderline nutty; the bulls and bears have both been empowered by the action-the former, given the latter can't crack the tape below S&P 1220 and the latter, given the former actually believes that.
  • Meanwhile, we're on a fast train to Flatsville, with the S&P, NASDAQ and DXY are all a stone's throw from the even in 2011.
  • While I've recently 'traded around' some Bank America (BAC) and Apple (AAPL)-as discussed in real-time each session on The Buzz & Banter (free trial!)-I have this nagging, steadfast, guttural sense that social mood will shape the financial markets-and we know which way that is heading (click here lest you need a reminder).
  • I'm nothing if not honest-all a man has is his name and his word-so I'll communicate that my risk appetite isn't what it used to be, and I've learned to trust my gut. I'm all for taking disciplined stabs when I perceive an edge-both ways, as a function of time and price-but there is typically an "'easy' trade" each day, and if I can capture that while keeping my overnight risk tight, I'll sleep better.
  • Remember, there's no shame in admitting it's hard; there's only shame in pretending it's not.
  • Germany is the best house in a tough European neighborhood and is widely considered "best in breed." With that said and respected, I'll draw your attention to two charts; the first is potential dandruff in the DAX (read: a bearish head and shoulders formation) that if triggered, could "work" to DAX 5000 and the second is a chart of the S&P vs. DAX. You will notice a widening of late, with the US outperforming Germany, but unless you believe in de-coupling-and I don't, with upwards of one quadrillion dollars in derivatives tying the world together-those charts, and countries, will trade in sync.

Click to enlarge


Click to enlarge
  • Good traders know how to make money; great traders know how to take a loss. I'm far from a great trader, but "taking a (small) loss" yesterday averted what would have been a big loss, and a "hope" situation this morning.
  • The addition of Disney (DIS) CEO Robert Iger to the Apple board bodes well for their future content relationship, above and beyond the much-anticipated TV launch.
  • Given all the focus on the pennant formation in the S&P, does anyone wanna bet a finski that the first break will be a false break?
  • I was tooling around the Twittersphere and stumbled upon Hoofy (@HoofyMV) and Boo (@BooMV) bantering with each other. I'm told they'll be doing this each and every trading session.
  • There's a thin line between patience and profitability-it's called the bottom line.
  • As always, I hope this finds you well.
R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
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 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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