Bullets over Broadway
One stock does not a market make.
- Google (GOOG) is trading up $20 (to an all-time high) on the heels of last night's earnings release. Their commentary regarding the growth and pricing power of online advertising is further proof of the transition on Madison Avenue. Convergence and technology will dramatically change how products will be marketed to the mainstream as conventional channels get squeezed.
- It's a big week for the greenback as today's hike, tonight's State of the Union and this weekend's G7 meeting combine for a tricky trifecta. DXY 84 remains an important inflection point and will have implications for the (recently quiet) asset class dance. If it pops through that zone (does anyone else sense an increasing consensus that it will?), the next resistance will be 3% higher (200-day moving average) and that could push gold to the 200-day ($412).
- The S&P and NDX both poked through the dreaded January downtrend lines yesterday. The next levels to note are S&P 1189 (50-day), S&P 1196 (previous "lower high") NDX 1534-1545 (January 20 gap) and NDX 1575 (50-day). Looking the other way, S&P 1164 and NDX 1470 are mission critical supports.
- Are the Knicks the Yankee's worst nightmare? Possibly, with the highest payroll in the NBA, it's hard to ignore the eye sore at Madison Square Garden. With all due respect to Allan Houston, he can leave an unselfish legacy by electing to retire and forfeiting the remainder of his contract. I know that's easy for me to say--it's not my coin--but there is ultimately a balance between self-worth and net worth.
- Is the VXO an obsolete measure of fear? It would be easy to draw that conclusion as the prolonged pounding of premiums have offered little in the way of predictive power. We need to remember, however, that this index has never been viewed as a causation of market moves. Without a catalyst, a complacent backdrop won't exacerbate the price action. But be careful of "new era" psychology as it's always a new paradigm until it isn't.
- We've started mapping out the details for MIM2:Return to the Butte. Last year's conference in Crested Butte was a spectacular affair that offered presentations in the morning, softball, mountain biking, rafting and hiking in the afternoon and festive dinners at night. We're still vetting out the details but I would be remiss if I didn't share my excitement. Minyanville is a community of human capital and the Colorado retreat is a manifestation of that vision.
- I've been selectively constructive on the market throughout this earning's season as the "broken clock" bounce was overdue (last week). The dynamic to now monitor is how the tape reacts to good news (Google (GOOG)) while remembering that the potential for monolithic (asset class) movements remain. Further, several bovine backstops (stochastics) have lost some of their panache as a function of the recent rally. Please keep an eye on the internals (single best intraday tell), Citigroup (C) and the financials (BKX 100), the semis (reverse dandruff in the SOX?) and the small caps. And remember, Minyans, FOMC days are always a tale of two tapes.
- "After better than expected earnings last quarter (October 21), Google (GOOG:NASD) opened the next day +21 points, made an intraday high of more than +30 points, and closed up more than +23 points. But on the same day, the Nasdaq 100 finished the day down more than -32 points. Will the same thing happen today? Hard to tell! But it's a reminder that we should keep our eye on the other stocks." -- Jason Roney on today's Buzz & Banter.
- Super Sunday Minyanfest will be held at ONE Little West 12 starting at 6pm. The game will be shown on a big screen and there will be plenty of other folks watching along. I'm not sure how many professors will attend but Collins, Macke and I will be there with bells on. I know it's a tall order for a Sunday night but if you're in NYC and wanna swing by for a shmoke and a pancake, feel free!
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 email@example.com.
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