Thank you very much;
you're only a step away from
downloading your reports.
Todd Harrison: Revisiting the Smart Money
The largest divergence since 2007 remains in play.
Todd Harrison    

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.

I return from a respite with my family to find the markets higher than they were a week ago. 

In fact, the all-important S&P (INDEXSP:.INX) 1850 level is again underfoot despite non-confirmation from the banks (below BKX (INDEXSP:BKX) 71.50), tech (under NDX (INDEXNASDAQ:NDX) 3640),and the small caps (beneath RUT (INDEXRUSSELL:RUT) 1182).

Only the transports (above TRAN (INDEXDJX:DJT) 7600) are supportive of a continuation of the holiday-thinned rally, at least through the lens of the sub-sector price action. The biotech complex, for its part, broke the 200-day (IBB (NASDAQ:IBB) 220) but is marginally above it as of this post.

Before I unplugged last week, I wrote The SMART Money Strikes Again to highlight the divergence that had preceded the previous downdraft. 
The following description of the Smart Money Flow Index is from Bloomberg (paraphrased):

The Smart Money Flow Index (SMFI) is calculated by taking the price of the Dow Jones Industrial Average (INDEXDJX:.DJI) at 10:00 a.m. on any given day, subtracting it from the previous day's close, and adding it to the next day's closing price. The first 30 minutes represent "emotional buying," driven by greed and fear of the crowd; smart money typically waits until the end of the day.  If/when the DJIA makes a new high that is not confirmed by the SMFI, there is usually trouble ahead.

In an effort to remain consistent in our approach, I've updated those charts below. 

You will notice that we are still at levels last seen in 2007, which may prove to be a false tell but should, at the very least, be considered when making financial decisions.




 
R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real time with a FREE 14 day trial to Buzz & Banter.
< Previous
  • 1
Next >
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 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: Revisiting the Smart Money
The largest divergence since 2007 remains in play.
Todd Harrison    

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.

I return from a respite with my family to find the markets higher than they were a week ago. 

In fact, the all-important S&P (INDEXSP:.INX) 1850 level is again underfoot despite non-confirmation from the banks (below BKX (INDEXSP:BKX) 71.50), tech (under NDX (INDEXNASDAQ:NDX) 3640),and the small caps (beneath RUT (INDEXRUSSELL:RUT) 1182).

Only the transports (above TRAN (INDEXDJX:DJT) 7600) are supportive of a continuation of the holiday-thinned rally, at least through the lens of the sub-sector price action. The biotech complex, for its part, broke the 200-day (IBB (NASDAQ:IBB) 220) but is marginally above it as of this post.

Before I unplugged last week, I wrote The SMART Money Strikes Again to highlight the divergence that had preceded the previous downdraft. 
The following description of the Smart Money Flow Index is from Bloomberg (paraphrased):

The Smart Money Flow Index (SMFI) is calculated by taking the price of the Dow Jones Industrial Average (INDEXDJX:.DJI) at 10:00 a.m. on any given day, subtracting it from the previous day's close, and adding it to the next day's closing price. The first 30 minutes represent "emotional buying," driven by greed and fear of the crowd; smart money typically waits until the end of the day.  If/when the DJIA makes a new high that is not confirmed by the SMFI, there is usually trouble ahead.

In an effort to remain consistent in our approach, I've updated those charts below. 

You will notice that we are still at levels last seen in 2007, which may prove to be a false tell but should, at the very least, be considered when making financial decisions.




 
R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real time with a FREE 14 day trial to Buzz & Banter.
< Previous
  • 1
Next >
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 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.

More From Todd Harrison
Todd Harrison: Revisiting the Smart Money
The largest divergence since 2007 remains in play.
Todd Harrison    

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.

I return from a respite with my family to find the markets higher than they were a week ago. 

In fact, the all-important S&P (INDEXSP:.INX) 1850 level is again underfoot despite non-confirmation from the banks (below BKX (INDEXSP:BKX) 71.50), tech (under NDX (INDEXNASDAQ:NDX) 3640),and the small caps (beneath RUT (INDEXRUSSELL:RUT) 1182).

Only the transports (above TRAN (INDEXDJX:DJT) 7600) are supportive of a continuation of the holiday-thinned rally, at least through the lens of the sub-sector price action. The biotech complex, for its part, broke the 200-day (IBB (NASDAQ:IBB) 220) but is marginally above it as of this post.

Before I unplugged last week, I wrote The SMART Money Strikes Again to highlight the divergence that had preceded the previous downdraft. 
The following description of the Smart Money Flow Index is from Bloomberg (paraphrased):

The Smart Money Flow Index (SMFI) is calculated by taking the price of the Dow Jones Industrial Average (INDEXDJX:.DJI) at 10:00 a.m. on any given day, subtracting it from the previous day's close, and adding it to the next day's closing price. The first 30 minutes represent "emotional buying," driven by greed and fear of the crowd; smart money typically waits until the end of the day.  If/when the DJIA makes a new high that is not confirmed by the SMFI, there is usually trouble ahead.

In an effort to remain consistent in our approach, I've updated those charts below. 

You will notice that we are still at levels last seen in 2007, which may prove to be a false tell but should, at the very least, be considered when making financial decisions.




 
R.P.

Twitter: @todd_harrison

Follow Todd and over 30 professional traders as they share their ideas in real time with a FREE 14 day trial to Buzz & Banter.
< Previous
  • 1
Next >
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 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.

EDITOR'S PICKS
 
WHAT'S POPULAR