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Todd Harrison: The Stock Market in Perspective
To appreciate where we are, we must understand how we got here
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.

Has anyone seen Inspector Kemp?  He's running around telling anyone who will listen about the riot in stocks today.

He's right -- it's angry out there in the stock market -- but he needs to chill. 

The VXO (INDEXCBOE:VXO) under 15 is not a riot. 

The S&P 500 (INDEXSP:.INX) in a 50-handle range for three months? Nope, not a riot. 

The Russell 2000 (INDEXRUSSELL:RUT) down 7% in a month?  A bummer, yeah-but not a riot. 

Stocks like Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX) and Facebook (NASDAQ:FB) down more than 20% in the last six weeks? Well, maybe a slow-motion riot...

It's all relative; to illustrate that point, I've included a 10-year chart of the Nasdaq-100 (INDEXNASDAQ:NDX) below. While this complex has been under pressure of late, some long-term flavor will provide necessary perspective. 



Nestled within that chart: a housing bubble and bust, the financial crisis, high-frequency trading, extraordinary central bank interventions, countless Fed jawbones, a multitude of economic reports, incredible innovation, and 40 cycles of earnings releases. All things considered, it was a banner decade to own stocks

I will also note that the last five years have been what industry veterans call a "straight-up" tape. The thing about parabolic frolics is that making money is perceived to be a right, rather than a privilege. Yes, we've had this discussion before -- and that's sort of the point.

As more and more firms tweak the plumbing of the stock market -- this is where I perceive the most tangible HFT risk to be -- the process of price discovery will continue. Put another way, if we are to rewire the routing of US equities after all these years, it's akin to changing an airplane engine mid-flight.

Discipline over conviction as we together find our way.
 
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.
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: The Stock Market in Perspective
To appreciate where we are, we must understand how we got here
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.

Has anyone seen Inspector Kemp?  He's running around telling anyone who will listen about the riot in stocks today.

He's right -- it's angry out there in the stock market -- but he needs to chill. 

The VXO (INDEXCBOE:VXO) under 15 is not a riot. 

The S&P 500 (INDEXSP:.INX) in a 50-handle range for three months? Nope, not a riot. 

The Russell 2000 (INDEXRUSSELL:RUT) down 7% in a month?  A bummer, yeah-but not a riot. 

Stocks like Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX) and Facebook (NASDAQ:FB) down more than 20% in the last six weeks? Well, maybe a slow-motion riot...

It's all relative; to illustrate that point, I've included a 10-year chart of the Nasdaq-100 (INDEXNASDAQ:NDX) below. While this complex has been under pressure of late, some long-term flavor will provide necessary perspective. 



Nestled within that chart: a housing bubble and bust, the financial crisis, high-frequency trading, extraordinary central bank interventions, countless Fed jawbones, a multitude of economic reports, incredible innovation, and 40 cycles of earnings releases. All things considered, it was a banner decade to own stocks

I will also note that the last five years have been what industry veterans call a "straight-up" tape. The thing about parabolic frolics is that making money is perceived to be a right, rather than a privilege. Yes, we've had this discussion before -- and that's sort of the point.

As more and more firms tweak the plumbing of the stock market -- this is where I perceive the most tangible HFT risk to be -- the process of price discovery will continue. Put another way, if we are to rewire the routing of US equities after all these years, it's akin to changing an airplane engine mid-flight.

Discipline over conviction as we together find our way.
 
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.
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
Daily Recap
Todd Harrison: The Stock Market in Perspective
To appreciate where we are, we must understand how we got here
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.

Has anyone seen Inspector Kemp?  He's running around telling anyone who will listen about the riot in stocks today.

He's right -- it's angry out there in the stock market -- but he needs to chill. 

The VXO (INDEXCBOE:VXO) under 15 is not a riot. 

The S&P 500 (INDEXSP:.INX) in a 50-handle range for three months? Nope, not a riot. 

The Russell 2000 (INDEXRUSSELL:RUT) down 7% in a month?  A bummer, yeah-but not a riot. 

Stocks like Tesla (NASDAQ:TSLA), Netflix (NASDAQ:NFLX) and Facebook (NASDAQ:FB) down more than 20% in the last six weeks? Well, maybe a slow-motion riot...

It's all relative; to illustrate that point, I've included a 10-year chart of the Nasdaq-100 (INDEXNASDAQ:NDX) below. While this complex has been under pressure of late, some long-term flavor will provide necessary perspective. 



Nestled within that chart: a housing bubble and bust, the financial crisis, high-frequency trading, extraordinary central bank interventions, countless Fed jawbones, a multitude of economic reports, incredible innovation, and 40 cycles of earnings releases. All things considered, it was a banner decade to own stocks

I will also note that the last five years have been what industry veterans call a "straight-up" tape. The thing about parabolic frolics is that making money is perceived to be a right, rather than a privilege. Yes, we've had this discussion before -- and that's sort of the point.

As more and more firms tweak the plumbing of the stock market -- this is where I perceive the most tangible HFT risk to be -- the process of price discovery will continue. Put another way, if we are to rewire the routing of US equities after all these years, it's akin to changing an airplane engine mid-flight.

Discipline over conviction as we together find our way.
 
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.
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.

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