Random Thoughts: Does the Pain in Spain Forecast Rain?
The IBEX is trading at levels last seen in March 2009.
I returned to Minyanville headquarters at 9:29 this morning—always early—following a 4 a.m. wake-up and 6 a.m. flight out of F-L-A. It was a business trip—and a fruitful one at that—but after 20 years of trading, I still find it peculiar to be away from my turret when the markets are open. Who was it that said, “We tend to overvalue the things we can measure and undervalue the things we cannot"? Indeed.
Some top-line vibes, in no particular order:
While I was taking off yesterday morning, 10 minutes after the stock market opened—as the flight attendant scowled at me for not turning off my cellular device—I covered a healthy dose of market exposure.
I had to with the S's down 18 and the N's down 40ish; discipline trumps conviction). That turned out to be the meat of my trading activity yesterday as JetBlue has yet to add trading platforms into the section with extra leg room.
I’ve been actively trading my risk today, as updated in real-time on the Buzz & Banter (click here for a free two-week trial).
While Europe and China battle for market mind-share, earnings will offer the first tangible evidence of "economic acceleration" or "slowing global growth." You know my view—that this discussion is academic for as long as there is an asterisk next to free-market capitalism—but as we're apt to say in the 'Ville, we must trade the tape we have, not the tape we want.
The true test, of course, will arrive when the punch bowl is removed—if and when.
Google (GOOG), JPMorgan (JPM), and Wells Fargo (WFC) will set the tone later this week. While Alcoa (AA) officially kicks off the season tonight, I view that as terrific PR rather than a forward-looking economic indicator.
Do you remember last Wednesday when I offered that both the S&P and NDX would likely trade to their 50-day moving averages, at the very least, and their 200-day moving averages, more likely than not? Fast-forward 4% and the S&P is just about there.
Spain is at the lowest level since March 2009—and over the same span, the S&P is up 100%. That’s nuttier than Austin Powers coffee!
- Watch the financials for obvious reasons; Barclays (BCS) is down 3.5%). And monitor the four-letter freaks—with a particular eye on Apple (AAPL). Tech has been holding up today's tape (N's over S's) and if it loses its bid, Lucy will have a whole lot of splaining to do.
The NDX 50-day, just so you have it etched in the back of your crowded keppe, comes into play at NDX 2643, or 3.3% below current levels.
- As always, I hope this finds you well.
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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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