The Most Important Levels of the Year Converge
It's do-or-die for the year-end try.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
Late yesterday on our real-time Buzz & Banter, we shared:
"While I missed the move yesterday (Tuesday) -- a 30 NDX-handles Snapper anyway -- I'm not so quick to dip my shtick the second time around. Why? A boiling toad comes to mind; the first bounce was intuitive given how quickly we got there (the 200-day). Now, we're meandering toward these levels of lore; conviction levels around the Street appear reactive at best. Talk about performance anxiety -- yikes!
"While we are supposed to get more constructive at lower levels -- and I am, on the margin -- we would be wise to respect the technical damage that has taken place (trend channel break, lower highs) as we map our forward path. I do foresee "N's over S's" (NDX outperformance of S&P) based on the charts below, but I would define risk on any upside tries and treat them for what they are: pure trades."
On Tuesday I shared, "Facebook continues to hold the all-important $19 level BUT earnings tonight will move the stock $5 in either direction, in my view." The stock traded $5 higher yesterday (although I did not participate).
- What's the difference between the Federal Reserve and the European Central Bank? The folks across the pond aren't afraid to utter the dreaded "D" word. Remember, Deflation in a fractional reserve banking system means that policymakers have, for all intents and purposes, lost the battle of evermore.
Aside from some "put-away" long-term lottery tickets in the cannabis space (this may be my most fertile investment thesis for the next decade), I'm patiently waiting for a perceived edge. It's not easy but it's a necessary discipline if you're in hit-it-to-quit-it mode, as I am.
- Remember, with year-end dangling in the distance, the buyers are higher and the sellers are lower. That's the way performance anxiety works; and if you can remove emotion from the mix and let the tape come to you, using prices to your advantage, you're one step ahead of the game.
- Good luck today, and come on now -- sign up for Festivus on December 7!
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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 firstname.lastname@example.org.
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