Random Thoughts: Can Politicians Act Without a Crisis?
Levels, stocks, the fiscal cliff, and my weekend risk profile.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
I made an executive decision this morning. Following the health scare earlier this week, I've left the burbs each morning before my daughter awoke and arrived home after she was asleep. Indeed, the only time I've seen her was to tend to her during the night as she chews through the croup.
That's not acceptable, and following another late night at the office -- 9:00 p.m., anyway -- I opted to skip the early train this morning and have breakfast with my angel before her doctor appointment. As we work to live rather than live to work, I will argue that this is the best trade I've made in a long time!
Some Random Thoughts, some of which we've touched on but all of which matter:
- S&P (INDEXSP:.INX) 1435 and NDX (INDEXNASDAQ:NDX) 2700 remain levels of lore for traders galore, both were rejected on Wednesday by da bears.
- If the S&P can bust a move higher, through that level, it "works" through a pure technical lens, to S&P 1520. If the NDX can giddy-up through NDX 2700, it "works" to NDX 2900. You can see those chart patterns in yesterday's vibe, The Most Important Levels in the World!
- Seeing both sides (read: in terms of support), the S&P 50-day is right here, right now (S&P 1415), and for the four-letter freaks, there is a cluster of support in and around NDX 2625. See both sides; always see both sides!
- This face for radio did just that on Wednesday, sharing vibes on the 'Ville, The Ruby Peck Foundation for Children's Education, where we are in the recovery, what's happening in Europe, what investors should be watching for and just how evil (and un-evil) Wall Street is given the devolving social mood surrounding the space. You can watch, er, listen to that here!
- Keep half an eye on the price action in commodities; as we learned yesterday, we can learn a lot just by watching!
- The Iron Horse -- for all you old school faithful out there -- is looking for a boom (higher) before a bust (lower) that will make 2008 look like a garden party. I respect this dude so I am obliged to share his take.
As long as the markets put on a brave face, will politicians be motivated to map a solution to the fiscal cliff? It seems to me that decisions on the Beltway only get made as a function of need rather than want; and we all know that the stock market is the world's biggest thermometer.
- The bulls will argue that until the financials breach BKX (INDEXDJX:BKX) 47, all this red is dust in the wind. Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), Bank America (NYSE:BAC) -- the latter of which happens to be the best acting stock in the DJIA (INDEXDJX:.DJI) this year -- and Deutsche Bank (NYSE:DB) remain my tells in that regard.
In terms of performance anxiety proxies, I'm watching
Pfizer (PFE)Apple (NASDAQ:AAPL), which is getting beaten with an ugly stick -- AAPL $500 is THE level to watch, as flagged earlier this week -- Google (NASDAQ:GOOG), and Amazon (NASDAQ:AMZN).
- Why? We're getting to the point where anyone still at their turret is there for a reason, and if they need ketchup performance, they'll look for the highest bang-for-the-buck in high-beta.
- I'm long the 24 series box set and a wife on the mend and short a South African honeymoon in size. My only hope is that my wife Jamie will understand my teenage bromance with Jack Bauer!
- In terms of my real risk profile, it's remained largely in tact this week because of the following reasons:
My attention was focused on the important stuff earlier this week.
I've booked the lion's share of my pad after a decent year of fighting the good fight.
I own "situations" and I'm short the tape (smallish) against them via S&P February out-of-the-money puts.
If you press for performance, as many people are, odds are you'll face Death by Shmoopie (read: nick yourself with 1,000 paper cuts as you get bullish higher and bearish lower).
- I've had more meetings than eHarmony this week as we tie up another thriller in the 'Viller. It's all good, but I know that if I'm not 100% laser-focused, I'm at a natural disadvantage to my counter-party!
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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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