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Todd Harrison: Turnaround Tuesday Lives

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Crude trades heavy.

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It's Turnaround Tuesday and true to form, we've got an out-of-the-gate gap-and-go.  I know alotta traders who were looking to buy a gap lower this morning but true to the path of maximum frustration, that set-up didn't materialize.  Truth is, we had the 'gap lower' in the last half hour of yesterday's session so we would have to rally 26 handles in the S&P today just to recapture those sixty minutes.

Some Random Thoughts:

We should see a probe lower at a point but given the violence yesterday's late-day downdraft.  The question, as always, is one of timing and magnitude.

There are a few articles about how the Fed is running out of ammunition; I wonder if they've finally arrived at their last bullet?

Boy does Crude trade heavy.  Two weeks ago, we asked if there was a backroom deal between the US and OPEC with the intention of hitting Putin where it hurts.  That feels increasingly likely.

Corks, meet forks!  While my risk has become increasingly defined in the drillers (premium on call positions), I may have violated the lion's share of my 20 trading commandments in the process.

Sure felt like HFT "walked away" in the last hour yesterday.  The machine dependent market cuts both ways.

Lots of folks forget the relentlessness of the hand-over-first buying the last five-plus years.  The recent decline, as painful as it has felt, is a drop in the pond size-wise.

Trying to ascribe one reason why stocks have gotten hit is like trying to describe a person in a single word.  If I had to pick one?  Gravity.

Market breadth still 2:1 positive (3:1 in tech) during this press lower; it's early, but these are the types of things the bulls want/need to see.

And yes, there is a lot of trading left in the session.

Good luck today.

R.P.


R.P.

Twitter: @todd_harrison

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