By Todd Harrison Feb 09, 2006 8:45 am
Keep an eye on the S&P 50-day at 1269 please.
All my instincts, they return
And the grand facade, so soon will burn
Without a noise, without my pride
I reach out from the inside
It was a nutty session in the city of critters as Hoofy effectively jumped the Hump. Boo attempted to make a stand at S&P 1260 but a combination of strong earnings, tech leadership and held levels (BKX 101.5) morphed an honest effort into snazzy jazz. While the gains were broad and the mojo wide, moderate breadth tempered enthusiasm in select sour circles. Couple in the looming resistance in the once loved leaders (Citi, General Electric, Intel, IBM) and you have a recipe for a "show me" rally (in honor of John Chambers).
Rotation station remains front and center as volatility edges into the sector space. Pharma acted particularly well (on the heels of Pfizer) and smoked the 200-day anew. That keeps the aforementioned reverse dandruff in play and "fits" with the broader (bullish) vibes in the sector that Big Ben and I have shared in the past. And the Homies, which flexed some late day strength, remain stuck in the mud under HGX 260 (the 200-day). Keep that level on ye radar as we noodle the prospects (and far reaching ramifications) of housing.
We spoke early in the year about the likelihood that volatilities were gonna pick up and indeed they have. The 15% lift in the VXO understates the actual movement as individual equities are starting to act like swingers. That's good news for traders--indeed, I've heard from multiple channels that January was a banner month at alotta funds--and underscores the need for a disciplined approach. Remember, Minyans, as a function of compression, alotta players swapped size (and leverage) for sizzle and the former will potentially exacerbate the latter.
Circling back to Tuesday's Town Hall Chat at Harvard, it became obvious to Professor Succo and I is that folks are conditioned to believe what they read, see and hear in the mainstream media. That's not always a bad thing--there are good folks in that arena--but it isn't gospel either. We spoke about the new Fed sheriff and how he'll inherit a jail full of debt and dependency. We talked about the difference between patriotism and bullishness, a distinction lost on many people. And we spoke about the American Corporation and openly asked business students to study our balance sheet. "If this was a stock," I asked, "would you buy, sell or hold?"
And finally, on the MV housekeeping front, we continue to build our community through the organic roots of our Minyanship. If you would like to set up your firm or university with a gratis trial--much like we've done for the likes of Smith Barney and Georgetown--please give us a ping and we'll take it from there. These critters are a labor of love but our mission is possible with the kind help of ye faithful. Thanks much and know that we're bustin' hump to make you proud.
Good luck today.
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