Reactive Masses Await the Next Leg of the Stock Market
Observations from the front.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
One of the more pernicious consequences of multitasking while trading, running a small business, planning a philanthropic event (23 days until Festivus!), attending creative collaborations (MV Studios produces white-label solutions for enterprise clients), writing real-time content, mapping business development initiatives, vetting professors and managing a staff—while balancing the important stuff—is that there will be times when risk is blind. Yesterday afternoon was such a stretch.
As discussed in real-time—and later in the day on MV.com—we anticipated a Turnaround Tuesday Snapper (read: hard move higher) yesterday when we woke up to find the S&P (INDEXSP:.INX) and NDX (INDEXNASDAQ:NDX) futures in the hole. My chosen vehicle? Apple (NASDAQ:AAPL), as 1) it recently pulled back 23%, 2) had nice and tight defined risk (sell-stop under $630) and 3) it's the go-to name for upside performance anxiety, if that is the direction the dynamic plays out.
Better lucky than smart; less than an hour after the position was initiated, the stock popped 10 bucks. And while I made a token sale (discipline over conviction), I kept the meat of the exposure overnight, in large part because I was knee-deep in a (very positive) conversation with a potential partner and time kept on slipping slipping slipping into the future.
I enter today's session with a bias similar to what I shared the last two sessions: I'm allowing some wiggle room in and around S&P 1380 (1.5% or so) and so long as the bulls hold that line, my sense is that we see an upside try (led by the tech stocks, which were hammered almost twice as hard as their old-school brethren in the most recent downdraft, NDX -11% vs. SPX -6%).
It's just a feel, which is of course subject to change as a function of time and price. We will update this—and many other—positions in real-time over on the Buzz & Banter (click here for a free two-week trial!).
- If and when the buy-stops get cleared out (under S&P 1380), we could see a whoosh lower before any potential liftage. For comparative purposes, the false breakdown in June measured about 1.5% under the 200-day.
- Will Dr. Marc Faber be correct in his call for a market meltdown?
- I believe the two sides of the aisle will identify a solution prior to the fiscal cliff, but I'm not so sure Greece is in the euro (if there is one) a few years out.
- Note the financial complex; as go the piggies, so goes the poke. The BKX (INDEXDJX:BKX) 200-day is nestled immediately below at BKX 47.
Will Archer Daniels (NYSE:ADM) and/or Altria (NYSE:MO) corner the cannabis market when the time comes?
Why does the word, "anticlimactic" come to mind when vibing this week's tape?
- Short Google (NASDAQ:GOOG) against my long Apple (trade) or just peel out of Apple as a function of price? (The latter, as I'm in "hit it to quit it" mode.)
- Have you locked your spot for our philanthropic Festivus trot 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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