Names that were drawn to the strike on Friday will likely resume their natural path today.
I been gambling here abouts
for ten good solid years
If I told you all that went down
it would burn off both your ears
Does anybody else get the feeling that this week is gonna dictate the near-term fortune of the Minx? With expiration behind us, a truckload of catalysts in our midst and technical inflection points ahead, I get the sense that the reactive trading community is itching to get involved. Yes, my friends, this juncture will go a long way in shaping the collective psychology and, regardless of your current posture, we should ready ourselves for a long draw.
In overnight news, Deutsche Bank was positive on EBAY and upgraded DUK (to a hold), the mighty Bear is cautious on the trannies, Morgan upgraded CMCSA, SG Cowen upgraded NOK, Jefferies upgraded LOW (solid earnings), JP Morgan cut numbers in DIS and initiated BA with a neutral, Soundview cut numbers on INTC and AHO is having all kinds of accounting issues. The European bourses, meanwhile, are trading lower led by the German DAX (down more than 1.5%).
The technical metric warrants a discussion as we're floating around a couple of important zones. Once the expiration hangover subsides (and traders square away their peripheral risk), we'll be eyeing S&P 850-855 as an important resistance level. If we can garner enough jig to overcome that hump (what hump?), S&P 870 will line up in our crosshairs. On the downside, let's use Friday's low as first support.
In techland, I'd like to draw your attention to the COMP 1320 level. I've always keyed off of the NDX as that's what the QQQ (and NDX options) are priced from and, as such, it's a more important vehicle. Still, the NASDAQ COMP has been popping up on my chart work as it's held the 1320 level a few times (previous resistance, current support). Keep half an eye on that as we find our way through this week's muck.
The Goldman tech fete highlights a busy week in conference land and BMC, MRVL, QLGC, TXN, ISSX, BEAS, SANM, EXPE, ALTR, MSFT, MU, INTC, NTAP, VRSN, FLEX and HYSL are among those presenting. The Warburg chemical conference, Bear services gig and company sponsored meetings in SUNW, LU, NTIQ and WPPGY round out today's catalyst parade.
I enter today's mix with 2 legs in my metaphorical bear costume (50% conviction on the short side) and a rather unpleasant bug in my stomach. As discussed, the preponderance of my exposure is in defined risk paper and I'll be keeping very close tabs on our levels. I'll also be watching the banks (at BKX 725 resistance), the semis (haven't gotten through these levels despite a strong tape and two upgrades), GE (on the heels of a positive Barron's article), the retailers (consumer proxy and lotsa earnings this week), the macro tells (dollar, gold, oil) and our internals.
This is a big week and, as such, I'm trying to tough it out despite feeling like drek. It's also the start of our charity auction and the critters (who are uber-excited to have company) told me to suck it up and shake it off! I know they're right--this is a most worthy cause--and the responses thus far have been overwhelming. As it stands, James Goodman of New York is currently high bid at $2500. Thanks James!
See you after the opening.
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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