The Afternoon Draft
If you're getting bullish higher and bearish lower, take one giant step back.
Till the morning comes, it'll do you fine.
Till the morning comes, like a highway sign,
Showing you the way, leaving no doubt,
Of the way on in or the way back out.
The afternoon session squirrels right along and, once again, the Minx banged her keppe on S&P 1050. Brian and I have both discussed the pressing and guessing in the marketplace and, as it stands, the former has morphed into the latter. Now, as we edge towards the closing bell, the tension levels are starting to swell.
The thataway market continues as the financials trade fabu and the breadth remains minty. On the other side of the coin, General Electric (GE:NYSE) and Microsoft (MSFT:NASD) are heavy Betty's and, as they're the two biggest stocks in the equity universe, it's hard to imagine sustainable jig without them. Toss in our technicals and a bevy of unknowns (earnings) and, well, welcome to Postureville.
Bank of America (BAC:NYSE) and Mother Merrill (MER:NYSE) will highlight the morning stories and everyone seems to "know" that both will handily beat estimates. We've already talked about the snazzy charts and the potential caveats in this complex, so I'm not gonna be redundant. We've already talked about the snazzy charts and the potential caveats in this complex, so I'm not gonna be redundant. Suffice it to say that the collective reaction (and whether traders sell the news) will set an early tone for earnings week.
As far as the rest of today, we've just filled the aforementioned gaps and the (upside) piggyback attack is losing some sponsorship. We've now made two (count 'em) attempts at S&P 1050 and we know that each try at resistance (support) removes a layer of supply (demand). I'm still in the Burned Razor camp but file that factoid in the back of your trading brain. And don't overtrade, cookie--squeezing water from a stone is typically a blind man's bluff.
Finally, in response to my bean eating Minyan friends, I'm not saying that the Sox deserve all the blame. Zim shoulda never been over there in the first place, I have no idea what happened in the bullpen and it takes two to tango. With that said, Pedro lost a lot of respect in my book for A) that stupid pitch B) the bush league gesture and C) backpedaling on what he meant by it. Further, Rocket's toss was a good foot from Mannyville and if he acted appropriately (by not reacting), none of this woulda happened to begin with.
As always, I hope this finds you well.
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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