Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Random Thoughts: The Markets Are Playing in Their Band


Traders position as Turnaround Tuesday looms large.


"Some folks trust to reason, others trust to might. I don't trust to nothing but I know it come out right."
-- Grateful Dead

Last Tuesday on our real-time Buzz & Banter, we offered the following vibes on the near-term dirction of the equity markets:

"Through a technical lens, we continue to play within the bands on the S&P and NDX, as per the charts below. That's not to say we tag the top end of both-S&P 1420ish and NDX 2700ish-but the tape has "room" to those levels. And yes, the banks are hanging tough above the all-important BKX 44, so we've got that going for us."

Fast-forward six sessions. The S&P and NDX have rallied 20 and 40 points, respectively. While technical analysis is but one of four primary metrics -- with fundamentals, psychology, and structural influences serving as the other three -- we would be wise to note that we're edging toward the above-mentioned targets as Turnaround Tuesday looms large.

Random Thoughts:
  • Respect, but never defer to, the price action.
  • I bought half a position in Facebook (FB) last week as the stock probed $20-leaving dry powder for the 50% Fibonacci retracement at $19. I sold 20% of that position at $22 this morning while reminding myself, "Let your first sale be your worst sale." We continue to update that (pure ) trade in real-time on the Buzz & Banter.
  • NYSE internals are better than 2:1 positive, the financials are firm, the dollar is lower, and we've got mixed commodities. No great shakes from our market tells, but with Europe higher across the board (note Spain +4%), the bears continue to backpedal.
  • Some of today's move may be a relief rally on the heels of Knight Capital Group (KCG) surviving to fight another day. That may have stemmed perceived disruption in the near-term, but the convertible securities that were issued are massively diluted stock (which is why it's off 25% today).
  • And, the message that Knight CEO Tom Joyce sent to the market? The same as we've been saying for some time: Survive and thrive.
  • It's hard to complain about the commute home when so many people don't have a home to go home to.
  • With regard to the specter of QE3, I don't believe the Federal Reserve is keying off the latest economic data. The stock market is the world's largest thermometer in a finance-based global economy; with the S&P and NASDAQ up 11% and 15% respectively, we'll see more jawboning than stimulus until those averages give back their YTD gains.
  • Conventional wisdom is that Europe is fine and the worst is behind us. I don't have a crystal ball but I can share that ECB President Mario Draghi, with his now-famous "I'll do whatever it takes (to save the eurozone)" has opened the door to his inclusion in this column!
  • As always, I hope this finds you well.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.


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.
No positions in stocks mentioned.

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

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos