Todd Harrison: The Stock Market Is Waiting to Exhale
The bulls and bears battle for technical control of the tape.
The Hump Day cometh as we fire up our systems to find more of the same: The world of Wall Street is waiting to exhale.
As the bulls knock, knock, knock on heaven's door -- also known as S&P (INDEXSP:.INX) 1850 in less colorful terms -- the ability to clear that hurdle will go a long way in providing the near-term direction for the next leg for the tape.
A few observations on this technical toggle:
1. Given the collective focus -- and everyone is watching this -- we must be careful of false signals, at least initially, as the market tends to pave a path of maximum frustration.
2. Conventional wisdom is that we're going to bust through to the upside and there are likely traders anticipating the breakout -- and holding exposure to sell into it.
3. Sideways action (under the right shoulder) would keep the pattern in tact and create symmetry as far as the chart pattern is concerned, as long as S&P 1820 (1800) holds.
4. Technical analysis is one metric, albeit a metric that traders defer to in the absence of clarity. In other words, if all is quiet on the fundamental front and the structural landscape is status quo, folks will follow the charts, which, in turn, will shape the final metric, psychology.
We should view this technical catalyst for what it is -- a guideline, not a given -- and listen to what it is telling us (a measured move toward S&P 1960) with a respectful grain of salt.
- Russell (INDEXRUSSELL:RUT) 1182ish (bullish breakout to all-time highs vs. potentially bearish double top) remains on our radar today.
- The homebuilders open slack, again. HGX (INDEXNASDAQ:HGX) 210 is the 2013 high, for those who pay attention to such things.
- The first half hour is typically noise; remember that when initiating positions other than quick fades.
- The animal spirits are alive again -- both in the market (high beta) and my garage (a pesky raccoon).
- Chipolte (NYSE:CMG) = CMGI circa Y2K?
- The banks opened pretty in pink -- bending (as they have) is fine; breaking (if they do) will be a tell.
- BKX (INDEXSP:.BKX) 71.50 is the technical equivalent to NDX (INDEXNASDAQ:NDX) 3640, S&P 1850 and RUT 1182.
- Good traders know how to make money; great traders know how to take a loss.
- Good luck today, and remember -- discipline over conviction as we together find our way.
Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
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 email@example.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 Newsletter