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Critical Levels on the 25th Anniversary of the Crash

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Discipline over conviction 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.

So, what'd I miss?

While I spent yesterday running from the MV Board meeting to afternoon business melds, I could tell there was a lot going on. It was, after all, the 25th anniversary of the 1987 stock market crash -- Art Cashin has a great recap of that day here -- and that was in the back of my head as I honored my obligations.

How did I know there was action on the Street of Dreams? I was getting "pinged" with persistent texts about Google (NASDAQ:GOOG).

"Wow -- do you see this?"

"Hey man -- nice call! -- you still short?"

"The bigger they are, the higher they fall!"

To be clear, I was not short Google -- not anymore. I got stopped out of that negative bet a few weeks and many points ago, hat in hand, and to be honest: It's a good thing I was!

While I did write about revisiting the Long Apple (NASDAQ:AAPL)-Short Google pairs trade on Monday, I opted not to revisit that until Apple traded to $600ish (where the "dandruff" works on a chart).

Man, If I ever find the proverbial table that I continue to leave money on, I would have serious jingle in my jeans. You'll know the table as it has thousands upon thousands of Fannie Mae $70-line puts that expired worthless -- so if you see it, please lemme know!

What else? As discussed on Wednesday, before I flipped lids and juggled the struggle, I offered the following vibes (and I'll update them for this Freaky Friday).
  • We spoke yesterday (Tuesday) about two levels that "mattered" (for those who follow technical analysis) in S&P 1450 (INDEXSP:.INX) and NDX (INDEXNASDAQ:NDX) 2770.



Update: The NDX tickled the right shoulder and failed miserably yesterday. The S&P? Bend not break -- still -- and it's currently clinging to the lower band-tag of the uptrend that's been in place since the summer. I am still long some SPY (NYSEARCA:SPY) puts (added Wednesday with a stop above 1460) but this is simply a trade and will be treated as such.
  • Goldman Sachs (NYSE:GS), which was the lead dog on the downside yesterday following its earnings report, also warrants a mention as the insider sales window typically opens a few days after each report.
Update: The stock held tough yesterday -- which isn't a surprise as the insider window typically takes a few days before it opens. This is next week's business so keep your eye peeled.
  • If Facebook (NASDAQ:FB) wasn't reporting earnings next week, I would likely lean against the $19 level (again) for a long-side stab. As it is, and there is gap risk involved, I'm inclined to watch this rather than sweat the risk.
Update: The stock closed yesterday at $18.98 -- let's call it $19 -- and that's a big level that should hold into earnings. I'm admittedly tempted to buy some but I foresee some gap action coming out of the earnings report and I'm not in the business of flipping coins with my hard-earned...coin.
  • The always astute Smita Sadana draws attention to the importance of the small-caps, as measured by the iShares Russell 2000 Index (NYSEARCA:IWM). We can add this to our list of important technical toggles; check the chart below, and thanks, Smita!

Update: The small-caps came off (read: came for sale) yesterday right at the downtrend; IWM 82 is near-term support for those who are following this small-fry proxy.
  • Thanks to the folks at the Financial Times Press, Amazon is offering free Kindle downloads of Peter Atwater's book Moods and Markets through Sunday. For those looking to understand why he focuses so much on social mood and how it impacts decision-making in the marketplace, you will find the book to be very helpful!
Update: Yep, it's still free until Sunday -- and it's a very good read!
  • Festivus 2012 is seven weeks away -- yes, seriously! If you like live music, human capital, and helping children, this event has your name written all over it! Join us on December 7, 2012 and lock your spot for our holiday trot!
Update: Next week, this will be six weeks away! This is always a great time (click here to see pics from previous events) and it's for a great cause! This is us -- our community -- doing our part to help the kids and having a GREAT time doing it. Please join us -- and bring your dancing shoes.

Finally, RP Foundation Board Member Michael Capasso is trying to effect positive change one step at a time when he runs the NYC Marathon. Anyone who sponsors him $10/mile or more gets a "gratis" ticket to Festivus. Run, Michael, run!

Have an easy weekend -- you most certainly deserve it!

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 SPY

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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