My poor cubs!
Good morning and welcome to seventh heaven. With last night's fleas trying to please, we power up our systems with a bit of unease. We know, for sure, that there's no goat cure but is there truth to the curse of Ruth? We'll trade our blocks of large cap stocks but make no mistake--we're huntin' Sox! It's a jam packed crowd and it's getting loud so settle in, Yanks, and make us proud!
That batting cage was all the rage but the hits (and errors) weren't limited to the amazing playoffs. The overnight lineup stepped to the plate and some were soft, some fine, some great. The big dog last night was International Business Machines (IBM:NYSE) and they juggled the ball a bit. They took a called first strike on the third-quarter sales forecasts, got a huge benefit from the falling dollar (composition of earnings) and CEO Sam Palmisano, while opining that the economy has stabilized, offered that it's "too early to say that a rebound is at hand" (although he's confident that they will benefit when it happens). While they're planning on adding 10,000 jobs (positive), the overall tone was clearly muted relative to expectations.
This curve ball will offer an interesting pitch for the Minx. Yesterday's pop and drop (on Intel's (INTC:NASD) solid quarter served notice that the winds are starting to swirl at the stadium. While it's certainly too early to call the game, we'll need to pay particular attention to the signs relayed from the dugout. The breadth and financials should offer clues, as always, and we'll also need to pay close attention to those pesky SOX. They, like much of the broader market, have good looking charts but remain extended. It is, after all, October--don't the Red SOX usually fail this time of year?
We've spoken, at length, about the importance of the S&P 1050-1060 zone and, thus far, the bad news bears have held their ground. There are peripheral forces in play (structural liquidity, sentiment) and, as such, we must be conscious that it's not all earnings, all the time. Profitable trading is achieved by successfully assimilating all four trading metrics. In other words, if you're sitting on a fastball, the chances that you'll miss the change-up increases in kind.
You can observe a lot just by watching, Yogi, and there is surely a lot to look at. A bevy of big board beauties are reporting as I speak and it's gonna take some time to plow through these reports. If (big if) the Burned Razor thesis plays out (the mirror image of last year's play), the chopping and flopping will ultimately lead to a (gasp) downtrend (that shakes out the bandwagons) before snapping higher into year end (and failing anew in January). That doesn't mean it starts today (or yesterday) but, for what it's worth, it's the road map I'm eyeing.
First things first, we've got a full day in the fray and it promises to be a wild ride. Some serious snaps to our Marlin Minyans on a gutsy NLCS performance (sorry Cubbie fans--I feel for ya) and a couple of double gulps heading into tonight. We've got a LOT of bean eatin' Minyans (including our very own Brian Reynolds who, so you know, promised to shave his head if they win it all) and it's a great time to be a baseball fan. Let's take care of business first and coin a few shekels so we can all relax and enjoy the evening festivities.
Good luck today.
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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