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On Turnaround Tuesday, Important Levels Loom

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See both sides and define your risk as we together find our way.

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MINYANVILLE ORIGINAL

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

Turnaround Tuesday has arrived with everyone and their sister using S&P (INDEXSP:.INX) 1400 as some sort of magical toggle.

I've been there and done that over the course of my 22-year trading career -- "Short 'em!...sigh, cover." "Buy 'em!...grrr, punt it." -- and I guarantee that more than a few traders are absorbing those types of paper cuts as we dance on either side of that line.

A few hints on that front: Expand the parameters on your defined risk; it will make for a much smoother ride, and use tertiary (less obvious) tells as risk guides, such as the financials (which are currently mixed) and the high beta realm (which trades soft, thus far).

Recall from yesterday's Buzz (or, if you missed it):

"On November 13, while sensing the potential for a sharp Snapper in the midst of a meaty downdraft, we offered the following vibes:

"Where do I think Apple (AAPL) -- and by extension, the tech tape -- can trade to on the upside? The 200-day on each, $594 and NDX (INDEXNASDAQ:NDX) 2664 respectively, are as intuitive as any other levels...but given my chosen stylistic approach of 'hit it to quit it,' I will likely be long gone by the time, and if, those levels arrive."

True to form, I prematurely evacuated from my upside rentals -- the rally back to the 200-day in the S&P was the "easy" trade -- but I wanted to draw your attention to these levels, which now reside at $598 and 2667 respectively.

While we've got some wiggle before those corresponding levels in tech arrive, the slope of hope has gotten steeper for the bulls. My ducks aren't aligned quite yet -- we've still got some mixed signals, as discussed in real-time on the Buzz, and that's OK; oftentimes, the ability not to trade is as valuable as trading ability.

Market breadth is 9:5 on the big board (not yet qualified as a tell), Europe is mixed, and commodities are tame. All the while, the lower highs remain in place (as evidenced in the S&P chart below) and that's traditionally a (negative) sign of distribution. Food for thought as the NDX inches back toward the 200-day (which seemed like a long shot a few short weeks ago!).





Random Thought:

Festivus 2012 is 11 days away! If you dig live music, BBQ, human capital and helping children, this has your name written all over it. Join us at Hill Country BBQ on December 7 and help us do our part to give back to those less fortunate. Registration details can be found here -- and thanks!

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.

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