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Todd Harrison: Keep in Mind the Bull Case for the S&P 500
An inverse head-and-shoulders formation projects to 1968 on the S&P 500.
Todd Harrison    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

The tale of two tapes continues with a distinct "Ss over Ns" flavor (the S&P 500's (INDEXSP:.INX) outperformance of the NASDAQ 100 (INDEXNASDAQ:NDX)). That bifurcation is evident in the price action of financial stocks, which held the all-important KBW Bank Index (INDEXSP:BKX) 76 level, versus the downward action in high-beta tech (throw a dart because they're all under selling pressures). There has been incessant, yet unconfirmed, chatter that some tech funds are in trouble, which may be the cause of liquidation in some of these names. Personally, I don't like invisible catalysts, so take that with a grain of salt.

The bull case for the S&P -- and yes, there is one -- is illuminated in the chart below, which is a reverse head-and-shoulders formation.

http://image.minyanville.com/assets/buzzbanter/charts/original/050714/rd_spx_1399479022.gif
Click to enlarge

IF (again, this is a big if) the S&P can push higher through S&P 1895 to 1900, it works (through a pure technical lens) to S&P 1968. I'm currently in possession of a handful of SPDR S&P 500 ETF Trust (NYSEARCA:SPY) put options, so I'll stop myself out if that 1968 level is breached. Remember that I'm playing smaller in front of what I perceive to be an uptick in volatility.

One thing to keep in mind is that the market has seen some risk-off into the weekends of late given the geopolitical tensions in the Ukraine. It's only Wednesday, of course, but it's not too early to consider that possibility. There's a natural inclination to believe that Russia is Greece is Cyprus (read: it won't matter), but past performance is no guarantee of future results. Given the interconnectedness of the global financial machine, the compressed levels of volatility, and that pesky Bloomberg SMART Money Index, we'd be wise to see both sides.

As always, I hope this finds you well.

R.P.

Twitter: @todd_harrison

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Position in SPY.

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.

Todd Harrison: Keep in Mind the Bull Case for the S&P 500
An inverse head-and-shoulders formation projects to 1968 on the S&P 500.
Todd Harrison    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

The tale of two tapes continues with a distinct "Ss over Ns" flavor (the S&P 500's (INDEXSP:.INX) outperformance of the NASDAQ 100 (INDEXNASDAQ:NDX)). That bifurcation is evident in the price action of financial stocks, which held the all-important KBW Bank Index (INDEXSP:BKX) 76 level, versus the downward action in high-beta tech (throw a dart because they're all under selling pressures). There has been incessant, yet unconfirmed, chatter that some tech funds are in trouble, which may be the cause of liquidation in some of these names. Personally, I don't like invisible catalysts, so take that with a grain of salt.

The bull case for the S&P -- and yes, there is one -- is illuminated in the chart below, which is a reverse head-and-shoulders formation.

http://image.minyanville.com/assets/buzzbanter/charts/original/050714/rd_spx_1399479022.gif
Click to enlarge

IF (again, this is a big if) the S&P can push higher through S&P 1895 to 1900, it works (through a pure technical lens) to S&P 1968. I'm currently in possession of a handful of SPDR S&P 500 ETF Trust (NYSEARCA:SPY) put options, so I'll stop myself out if that 1968 level is breached. Remember that I'm playing smaller in front of what I perceive to be an uptick in volatility.

One thing to keep in mind is that the market has seen some risk-off into the weekends of late given the geopolitical tensions in the Ukraine. It's only Wednesday, of course, but it's not too early to consider that possibility. There's a natural inclination to believe that Russia is Greece is Cyprus (read: it won't matter), but past performance is no guarantee of future results. Given the interconnectedness of the global financial machine, the compressed levels of volatility, and that pesky Bloomberg SMART Money Index, we'd be wise to see both sides.

As always, I hope this finds you well.

R.P.

Twitter: @todd_harrison

< Previous
  • 1
Next >
Position in SPY.

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.

Daily Recap
Todd Harrison: Keep in Mind the Bull Case for the S&P 500
An inverse head-and-shoulders formation projects to 1968 on the S&P 500.
Todd Harrison    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

The tale of two tapes continues with a distinct "Ss over Ns" flavor (the S&P 500's (INDEXSP:.INX) outperformance of the NASDAQ 100 (INDEXNASDAQ:NDX)). That bifurcation is evident in the price action of financial stocks, which held the all-important KBW Bank Index (INDEXSP:BKX) 76 level, versus the downward action in high-beta tech (throw a dart because they're all under selling pressures). There has been incessant, yet unconfirmed, chatter that some tech funds are in trouble, which may be the cause of liquidation in some of these names. Personally, I don't like invisible catalysts, so take that with a grain of salt.

The bull case for the S&P -- and yes, there is one -- is illuminated in the chart below, which is a reverse head-and-shoulders formation.

http://image.minyanville.com/assets/buzzbanter/charts/original/050714/rd_spx_1399479022.gif
Click to enlarge

IF (again, this is a big if) the S&P can push higher through S&P 1895 to 1900, it works (through a pure technical lens) to S&P 1968. I'm currently in possession of a handful of SPDR S&P 500 ETF Trust (NYSEARCA:SPY) put options, so I'll stop myself out if that 1968 level is breached. Remember that I'm playing smaller in front of what I perceive to be an uptick in volatility.

One thing to keep in mind is that the market has seen some risk-off into the weekends of late given the geopolitical tensions in the Ukraine. It's only Wednesday, of course, but it's not too early to consider that possibility. There's a natural inclination to believe that Russia is Greece is Cyprus (read: it won't matter), but past performance is no guarantee of future results. Given the interconnectedness of the global financial machine, the compressed levels of volatility, and that pesky Bloomberg SMART Money Index, we'd be wise to see both sides.

As always, I hope this finds you well.

R.P.

Twitter: @todd_harrison

< Previous
  • 1
Next >
Position in SPY.

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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