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Todd Harrison: Gold, Cannabis, and the Russell 2000
Views and clues from the front lines of Wall Street.
Todd Harrison    

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

With the long weekend behind us and a holiday stretch here -- lots of kids, mine included, are off from school this week -- it's time to turn our attention to the flickering ticks.

In the interest of respecting your time, I'll offer some top-line vibes in no particular order:
  • The Nasdaq-100 (INDEXNASDAQ:NDX) broke out last week above 3640, which will serve as initial support on a pullback. The S&P (INDEXSP:.INX) stair-step range is 1800-1850, with stops likely nestled on either side of that ride.
  • Jeff Saut offers food for thought this morning regarding this juncture vs. previous market tops. As I've long believed that he's as good as it gets, I've learned to pay attention to what he says. Among his more salient observations, "Last week the New York Composite Advance/Decline Line rose to a new bull market high. That is not the kind of action one sees at market peaks."
  • I typically like to give the tape 30 minutes for the noise to dissipate before taking a read, and today is the perfect example of why that's usually a good idea.
  • Economic data has been soft of late, but everyone and their sister is blaming the weather. Interestingly, one would think that Amazon (NASDAQ:AMZN) would be doing great if folks are shopping online vs. slopping through the snow, but alas, it reported soft numbers as well.
  • While cannabis continues to be my single best investment theme for the next decade, investors would be wise to steer clear from penny stocks and identify real companies. There's a reason stocks are listed on the major exchanges; it's the first layer of due diligence to protect investors.
  • Two cannabis names that I've traded -- but I'm not currently involved in at the moment -- are GW Pharmaceuticals (NASDAQ:GWPH), which is up some 500% since last summer, and Medbox (OTCMKTS:MDBX). Both are extremely thin, so tread carefully if you choose to tread.
  • Given the recent rally in gold -- and our previously stated view that the chasm between gold and stocks should bridge -- I thought it might be helpful to update the chart below.

  • I enter this week with a short bet on the Russell 2000 (INDEXRUSSELL:RUT), via IWM (NYSEARCA:IWM) puts. I initiated this trade as a function of risk-reward (note the setup in the chart below) and fully aware that any short bet has been run over with dip buyers galore. It's a trade, that's all, with a stop above RUT 1160. (Editor's Update: Todd has been stopped out of this trade).
  • A fund manager recently mentioned that he was having a hard time finding individual stocks to buy. I told him that when I used to manage a $400 million fund and we couldn't find individual names we liked, we would usually short the indices and make good money. It's a market of stocks, not a stock market.
  • Who isn't conditioned to buy the first dip at this point?
  • OK, I'm ready for season three of House of Cards.
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.
Position in IWM

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: Gold, Cannabis, and the Russell 2000
Views and clues from the front lines of Wall Street.
Todd Harrison    

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

With the long weekend behind us and a holiday stretch here -- lots of kids, mine included, are off from school this week -- it's time to turn our attention to the flickering ticks.

In the interest of respecting your time, I'll offer some top-line vibes in no particular order:
  • The Nasdaq-100 (INDEXNASDAQ:NDX) broke out last week above 3640, which will serve as initial support on a pullback. The S&P (INDEXSP:.INX) stair-step range is 1800-1850, with stops likely nestled on either side of that ride.
  • Jeff Saut offers food for thought this morning regarding this juncture vs. previous market tops. As I've long believed that he's as good as it gets, I've learned to pay attention to what he says. Among his more salient observations, "Last week the New York Composite Advance/Decline Line rose to a new bull market high. That is not the kind of action one sees at market peaks."
  • I typically like to give the tape 30 minutes for the noise to dissipate before taking a read, and today is the perfect example of why that's usually a good idea.
  • Economic data has been soft of late, but everyone and their sister is blaming the weather. Interestingly, one would think that Amazon (NASDAQ:AMZN) would be doing great if folks are shopping online vs. slopping through the snow, but alas, it reported soft numbers as well.
  • While cannabis continues to be my single best investment theme for the next decade, investors would be wise to steer clear from penny stocks and identify real companies. There's a reason stocks are listed on the major exchanges; it's the first layer of due diligence to protect investors.
  • Two cannabis names that I've traded -- but I'm not currently involved in at the moment -- are GW Pharmaceuticals (NASDAQ:GWPH), which is up some 500% since last summer, and Medbox (OTCMKTS:MDBX). Both are extremely thin, so tread carefully if you choose to tread.
  • Given the recent rally in gold -- and our previously stated view that the chasm between gold and stocks should bridge -- I thought it might be helpful to update the chart below.

  • I enter this week with a short bet on the Russell 2000 (INDEXRUSSELL:RUT), via IWM (NYSEARCA:IWM) puts. I initiated this trade as a function of risk-reward (note the setup in the chart below) and fully aware that any short bet has been run over with dip buyers galore. It's a trade, that's all, with a stop above RUT 1160. (Editor's Update: Todd has been stopped out of this trade).
  • A fund manager recently mentioned that he was having a hard time finding individual stocks to buy. I told him that when I used to manage a $400 million fund and we couldn't find individual names we liked, we would usually short the indices and make good money. It's a market of stocks, not a stock market.
  • Who isn't conditioned to buy the first dip at this point?
  • OK, I'm ready for season three of House of Cards.
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.
Position in IWM

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: Gold, Cannabis, and the Russell 2000
Views and clues from the front lines of Wall Street.
Todd Harrison    

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

With the long weekend behind us and a holiday stretch here -- lots of kids, mine included, are off from school this week -- it's time to turn our attention to the flickering ticks.

In the interest of respecting your time, I'll offer some top-line vibes in no particular order:
  • The Nasdaq-100 (INDEXNASDAQ:NDX) broke out last week above 3640, which will serve as initial support on a pullback. The S&P (INDEXSP:.INX) stair-step range is 1800-1850, with stops likely nestled on either side of that ride.
  • Jeff Saut offers food for thought this morning regarding this juncture vs. previous market tops. As I've long believed that he's as good as it gets, I've learned to pay attention to what he says. Among his more salient observations, "Last week the New York Composite Advance/Decline Line rose to a new bull market high. That is not the kind of action one sees at market peaks."
  • I typically like to give the tape 30 minutes for the noise to dissipate before taking a read, and today is the perfect example of why that's usually a good idea.
  • Economic data has been soft of late, but everyone and their sister is blaming the weather. Interestingly, one would think that Amazon (NASDAQ:AMZN) would be doing great if folks are shopping online vs. slopping through the snow, but alas, it reported soft numbers as well.
  • While cannabis continues to be my single best investment theme for the next decade, investors would be wise to steer clear from penny stocks and identify real companies. There's a reason stocks are listed on the major exchanges; it's the first layer of due diligence to protect investors.
  • Two cannabis names that I've traded -- but I'm not currently involved in at the moment -- are GW Pharmaceuticals (NASDAQ:GWPH), which is up some 500% since last summer, and Medbox (OTCMKTS:MDBX). Both are extremely thin, so tread carefully if you choose to tread.
  • Given the recent rally in gold -- and our previously stated view that the chasm between gold and stocks should bridge -- I thought it might be helpful to update the chart below.

  • I enter this week with a short bet on the Russell 2000 (INDEXRUSSELL:RUT), via IWM (NYSEARCA:IWM) puts. I initiated this trade as a function of risk-reward (note the setup in the chart below) and fully aware that any short bet has been run over with dip buyers galore. It's a trade, that's all, with a stop above RUT 1160. (Editor's Update: Todd has been stopped out of this trade).
  • A fund manager recently mentioned that he was having a hard time finding individual stocks to buy. I told him that when I used to manage a $400 million fund and we couldn't find individual names we liked, we would usually short the indices and make good money. It's a market of stocks, not a stock market.
  • Who isn't conditioned to buy the first dip at this point?
  • OK, I'm ready for season three of House of Cards.
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.
Position in IWM

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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