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Random Thoughts: Expiration, Nationalization, and Realization


Tying together our five-session set.

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

Late yesterday, while trying to get out of my own way, I offered the following vibes on the Buzz & Banter:

The bears have to be frustrated with the price action into the bell as they had every opportunity to make a statement today. As it stands, the banks held their trendline, and the tech tape shouldered a shellacking in Apple (AAPL). We're not out of the woods -- note the analogy -- but in terms of a snapshot, it most certainly could have been worse.

I'm in a race against the bell to get this out so excuse the brevity; in terms of my positioning, I'm long some Banco Santandar (STD), LinkedIn (LNKD) (with a stop below $100), and my house-money Research in Motion (RIMM) September paper. Against that, I've got my S&P downside exposure (I pared some today) and my underneath puts in the Nasdaq. Net/net, I'm leaning short but more balanced than I was this morning.

On cue, the tape opened this morning with a better tenor as individual April options expired (April index options will do the same this afternoon). While those expiration influences will be in play today -- look for "pins" to strike prices when open interest is outsized relative to average daily volume -- our primary tells remain much the same. In short, note the BKX trend-line and the price action in Apple.

What we can't and won't see is the perception of further stimulus, with China serving as the latest whisper. It's funny in a not-so-funny way; free-market capitalism is looking to communist China as a next savior of the system. Just when we thought we'd seen everything, we realize we ain't seen nothing yet!

Random Thoughts:
  • Sacre Bleu! The French elections are this weekend and before you say, "Oui, oui," understand that Socialist Francois Hollande is currently leading conservative Nicolas Sarkozy in the polls.
  • Monsieur Hollande is in favor of higher taxes rather than public spending cuts, which could lead to higher French bond yields and potentially disrupt financial markets.
  • The tape is the moth and S&P 1379 (the 50-day) is the flame.
  • Do you think policymakers understand that you can't solve a problem by doing more of the same things that created the problem in the first place?
  • It's been a barn burner of a week on a number of fronts so I'm gonna tie this up, hop over to the Buzz, and spend the rest of the day figuring out the financial markets in real-time. Have a great weekend, Minyans; you've most certainly earned it!

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.
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Position in LNKD, STD, SPX, NDX, RIMM

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

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