Schaeffer's Outside the Box Blog
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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 Inc. (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.

Random Thoughts:

  • 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 Midland Company (NYSE:ADM) and/or Altria Group, Inc. (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 Inc (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?

R.P.

This article by Todd Harrison originally published on Minyanville.

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Twitter: @minyanville

Disclaimer: The views represented on this blog are those of the individual authors only, and do not necessarily represent the views of Schaeffer's Investment Research.


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