Random Thoughts: Social Unrest and Risk Rotation
Volatility is a trader's best friend -- but be careful!
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
So many times, it happens too fast; you trade your passion for glory. Don't lose your grip on the dreams of the past, you must fight just to keep them alive.
There’s been a lot of motion in the global stock market—and the world itself, for that matter.
Indeed, the single most important article you read this week may well be this missive by Ambrose Evans-Pritchard regarding social unrest in Spain and how protestors "will have to respond with all rigors to the grave accusation of high treason under the jurisdiction of military tribunals."
Talk about a tricky trifecta of societal acrimony, social unrest, and geopolitical strife!
We’ve been talking about this continuum for years—the “other side” of the stateside policy framework—and it’s unfortunately proving true with each passing day. As social mood dictates financial markets—with or without infinite stimuli—we would be wise to pay attention.
How do you trade that? Carefully.
How do you prepare for what’s to come? Stay SAFE, smile plenty, hug your kids, and teach them empathy and understanding. Regardless of which side of the aisle you’re on heading into the election, we can all agree that our children will bear the brunt of the policy decisions we continue to witness.
We owe it to them to make smarter decisions.
Trading the Tape!
Please see the snapshot of the 30-day NDX daily chart below. We are currently trading "in and around" levels last seen prior to when QE-Finity! was announced by the Federal Reserve.
Click to enlarge
Whether this is a healthy retracement—Technical Analysis 101 dictates that the time to buy a breakout is upon retest of the breakout level—or a reversal of fortune through the eyes of social mood and by extension the stock market (the world's biggest thermometer) will write the tale of our forward trail.
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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