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Random Thoughts: Respecting Important Levels


Trading is like a good diet. You can trip, but you mustn't fall.

  • Pharma is perking up and testing DRG 320. I own some calls in this complex but positions aside, I respect the importance of this level.

  • Given the run in Schering Plough (SGP) and Elan (ELN) (both up more than 20% from the January lows), I've have made some sales to respect the process.

  • Google $500. See it, please.

  • Market breadth, while negative, isn't horrid, which has left a window open for further upside testage.

  • Proactive patience has always served me in good stead.

  • Trading is like a good diet. You can trip, but you mustn't fall.

  • Jeezums! A Mercury Retrograde post-Bowl Monday? This calls for a steak sandwich... and a steak sandwich!

  • As a wise man once said, this too shall pass.

  • The bungee of discord was likely the easy trade and S&P 1405 looms large. I'm conscious that we've got room to S&P 1450ish (lower highs) but I've got more powder than positions following Friday's freaky fray.

  • What I do have, so you know, is partial and paired, with some pharma calls on the long side and a snivlet of financial puts against it. I do have a handful of situations as well but for puposes of this post, I'm talking broader, market, trading stuff.

  • Early eyes? Reddish, as they nestle betwen Super Sunday and Super Tuesday, and pinkish, at least as far as the banks are concerned.

  • The 3% pullback in the BKX is easily the standout action in the early Monday muck.

  • Hey, I can think of worse "stops" than Gisele.

Minyan Investment Perspective

I was speaking with someone over the weekend as they weighed their investment alternatives. After listening for a bit, I stopped and said "You know, it's not about figuring out what the market is going to do, it's more about what YOUR needs are. That, above all else, should dictate your decision making process."

I wanted to share the takeaway with hopes that it provides utility at some level. For contextual perspective, this particular person is eyeing retirement and wants to protect her nest egg.

  • Only "risk" what you can afford to lose. Once you identify what you're "open on," you can determine the appropriate allocation.

  • Once you determine that speculative exposure, the next step is to juxtapose a time horizon for that risk.

  • If you're looking to preserve capital, make sure that it's in a money market that is backed by treasury bills and avoids the word "enhanced" (which likely means it has a commercial paper, CDO or other exotic instruments imbedded in it).

  • Understand that there are agenda in play and remain proactive rather than reactive.

  • Avoid stock tips and the lure of fast fortunes. There's no such thing as a quick fix. Well, maybe there is but they're few and far between.

  • Capital preservation, debt reduction and financial intelligence are three core holdings to any portfolio.



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

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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