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A Bird's-Eye View of the Stock Market


Pick your spots -- and balance your time.

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

I had two William Wallace moments yesterday-I teed up some BlackBerry (BBRY) to buy in and around $12.60 ($12 has been my oft-stated desired entry point) but held, held....and didn't pull the trigger (the stock finished the session +6%). The other was a quick fade (sale) of the tech tape out of the opening gate as I saw Google (NASDAQ:GOOG), Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) slip lower but again, I hand-sat.

Part of the rationale (not that you care, but I always share my thought process) is that I had my YPO board meeting at high noon which kept me "risk blind" for two hours. As I told Aaron Task yesterday morning, as we bantered prior to our interview, part of the reason I've embraced the "hit-it-to-quit-it" stylistic trading approach is because I'm often away from the tape for hours at a clip. In short, the only way I can manage risk (as opposed to "hope" for reward) is if I keep it on a tight leash. And yes, opportunities are made up easier than losses.

In terms of the tape, we saw "S's over N's" (S&P (INDEXSP:.INX) out-performance of NDX (INDEXNASDAQ:NDX)) yesterday-spied early on our real-time Buzz & Banter-and that continued to continue throughout the session, although the absolute price movement was tame for the broader indices. I suppose that jibes with my desire to play more alpha (individual stocks) and less market (which is crowded), at least until such time that an advantageous risk-reward emerges (S&P 1580 comes to mind, if and when).

Away from the tick-by-tick, minute-to-minute stuff, the chasm between perception and reality continues to widen, perhaps even more so than what we vibed in December 2006. I suppose that shouldn't be a shocker (we know this dynamic is cumulative) but it doesn't make it any less real. While the papers and pundits scream all-time highs, the rest of the world, it seems, remains mired in The Age of Austerity (if you missed that article the first time around, it's a worthy read).

Indeed, it's taking thrice the effort to make half the money (if that) in today's day and age (for most of us, anyway), and while I'm not smart enough to know when that will matter, I'll bet my bottom dollar that it most certainly will (and for many, it already has). That's the thesis of my presentation at The Social Mood Conference next month-Social Mood Is a Leading Indicator for the Stock Market-and while all the pieces seem to be falling into place, that multi-linear puzzle is ever-changing.

Yes, that has implications for the markets and our investments-and my task at hand is to tie them together in real-time-but it's not just about bringing home the Benjis. The implications and ramifications reach far beyond my pay-grade or our generation. I was reminded of that Tuesday night when my old bones limped home at 8:00 p.m. to see the twins (my daughter Ruby was down). Gavin asked me, "How was the ECO and MED-ia today?" It was all I could do to muster a smile and say, "It's all good, young man."

One day he'll be old enough to understand-and yes, fight the good fight for himself-but for now, I'm content to let his travails focus on issues entirely more relevant for a nine-year-old, for his innocence-the wide-eyed passion, thirst for knowledge and adorable manner-should not be wasted on the same lessons that are (in the process of) being taught to policymakers, politicians, and yes, the rest of the civilized world. Make no mistake-just as a certain president prematurely declared "Mission Accomplished" a few years ago, a similar situation is evolving in the system formerly known as capitalism.

One day, we'll look back at this and it will all seem funny but for now, and despite the headlines, it's anything but, all-time highs notwithstanding.

The Stock Market: Are We There Yet?

In short, the answer is no-at least in terms of the price action. We saw a probe lower yesterday morning-thanks Fletch!-and true to form, or the form since November 16-the tape responded with some upside vigor. You can agree, disagree, or agree to disagree with the "why," "what" or "how," but you cannot ignore what we've seen and yes, continue to see.

In terms of the broader market, you know what I know-that S&P 1580 is the next tradable technical context. We also know-the other way-that any violation of S&P 1525, NDX 2750 and/or BKX 54 would raise a red flag (literally and figuratively). That's the current stair-step, and we're just playing, playing in the band as we sort out this Grand Experiment.

Respect, but don't defer, as we continue to find our way.

Random Thoughts:
  • This Yahoo Finance video is a real-time example of what hair deflation and weight inflation look like.
  • View obstacles as opportunities and problems as possibilities; it will change your world.
  • It's still Mercury Retrograde (ugh; true!) but we should find some relief after March 17.
  • Technical analysis dictates that the time to buy (sell) a breakout (breakdown) is upon the retest of those levels. In real-time parlance, that's S&P 1525/1530 and NDX 2750/80.
  • George Friedman of the always excellent Stratfor Global Intelligence report, offers his thoughts on why social mood matters in Europe.

Disclosure: Minyanville has a business relationship with BlackBerry.

Twitter: @todd_harrison

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