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Todd Harrison: Freaky Friday Random Thoughts


Traders shed risk into the weekend.

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

It's Freaky Friday -- and a sloppy one at that -- so in the interest of respecting your time, and as a function of not having much myself, we'll dive right into it.

Random Thoughts:

  • Yesterday we offered that Russia may very well matter again. That didn't take long.
  • Remember, the end goal of war -- in various, capacities -- is economic destruction. We're not there yet, but the needle continues to point in that direction. And please don't shoot the messenger, particularly one who has been to 60 Grateful Dead shows (peace).
  • We updated the SMART money index below; you'll note that the two sides have now 'hooked' toward each other, with a long way to go before they reconcile. It's just one measure, of course, but it's worth keeping an eye on as it has preceded downdrafts in the past.

  • Consumer nondurables -- traditionally a safe haven -- and metal equities are a better bid on a relative basis today. The semis, weighed down by KLA-Tencor (NASDAQ:KLAC), are a source of funds, along with the high-beta realm.
  • Interestingly, biotech hangs in above the 200-day moving average at IBB (NASDAQ:IBB) 221.50.
  • The CBOEO EX Implied Volatility (INDEXCBOE:VXO) index is up 10%; all the way to 14.  It's got plenty of room through a historical lens.
  • The banks lagged the reflex rally in the S&P 500 (INDEXSP:.INX), per the second chart below. As go the piggies...

  • Geopolitical concerns into the weekend? I feel like we've seen this movie before.
  • GW Pharma (NASDAQ:GWPH) is sitting on its 50-day moving average in and around $62.50. The 200-day, for purposes of perspective, is down at $36. I sold my stock this week between $66 and $71 and will look for the right time and price to reenter.
  • NYSE (INDEXNYSEGIS:NYA) internals are 2:1 negative, while Nasdaq 100 (INDEXNASDAQ:NDX) breadth is 4:1 negative, which is helping to drive another "S's over N's" outperformance.
  • In a world of high-frequency trading (HFT), the markets can change on a dime; given the current price action and internals into the weekend, it's the bears' ball to fumble into the close.
  • The bulls will argue that the market is deflating the frothiest sectors (high-beta tech) with the S&P less than 2% from all-time highs. That's true, with the caveat that these names led us higher and they may well lead us lower.
  • Amazon (NASDAQ:AMZN) is down $55 (17% from its overnight high), Tesla (NASDAQ:TSLA) down $10, Netflix (NASDAQ:NFLX) down $15, Priceline (NASDAQ:PCLN) down $42 -- just another day at the office.
  • Days like today yearn for some trading commandments, and here they are.
  • As always, I hope this finds you well.

Twitter: @todd_harrison
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