Trading the Tape in Front of Goldman
While the last few months have been a difficult market to trade, the dawn of the decade offers fresh hope and plenty of promise.
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A few weeks ago, we shared a chart from one of ye faithful highlighting the 50-month exponential moving average that was in play in and around S&P 1150.
Click here to enlarge
This past Friday, we noted the layered resistance all the way to S&P 1200. While that first level has been tested more often than Manny Pacquiao, it hasn't been breached and remains very much in play.
Yesterday, we drilled down a bit deeper into the near-term road signs. We've got the New Year Champagne Pop Gap fillage (S&P 1127-1115), the Q4 trading range and the upward sloping trend channel. Commingle these singles and we arrive at staggered support at S&P 1027 (I don't expect that to hold), S&P 1115-1120 and finally, S&P 1080. If every journey is comprised of single steps, these footprints should help pave the way.
I've been trading around some short side gamma in the S&P but failed to pull the trigger on adding further downside exposure into yesterday's close (despite inclinations that the notion of gridlock as a positive catalyst were misplaced). I was planning to do that into any morning Snappage but we never saw our resident turtle.
You wanna know what I did about that? Nothing; pressing is a surefire way to unhinge your trading mojo and opportunities are made up much easier than losses. While the last few months have been a difficult market to trade, the dawn of the decade offers fresh hope and plenty of promise. I don't know about you but I, for one, welcome this shift even if it's perceptual.
Scanning the globe, the dollar (session highs) jumps out and the green seeds (Bank of America (BAC), American International Group (AIG), Smith (SII), Wells Fargo (WFC)) are being overwhelmed by red fleas (market internals are 5:1 negative). While I expect further downside, it's worth noting 1) that's one man's humble opinion and 2) we're smack dab in the middle of earnings and Granny Goldman (GS) is waiting in the wings. In that regard, peak earnings have likely passed (read: the easy money has been made) but we must respect that this is one stock that can seriously shift sentiment. That, coupled with its relatively dry action today, is the seed of doubt in Boo's banged-up brain.
Speaking of which, did anyone else see that Real Sports segment on football brain injuries last night? Talk about cause for pause; that's a lot to think about, not only for fans of the game (hand raised) but for parents of children who wanna play with the pigskin. Now's not the time or place to discuss, I know, but it's worth watching if you fall into either of those categories.
Lemme hop; that inbox Sisyphus thing is acting up again. As always, I hope this finds you jinglin'.
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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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