Bullets over Broadway
Hit 'em hard, Minyans!
- The Thursday blur is set to start as Hoofy nurses a broken heart. A few days ago, according to the media cheerleaders, our once brazen bull was the Minyanville MVC. The S&P and DJIA were breaking out, the homies, trannies and Utes were ticklin' all-time highs and there was nary a bear in sight. It was almost too good to be true and, in fact, it was. That very same field is now littered with yellow flags, bovine blood and a nasty collection of used Kleenex. The Matador Crowd, now stunned and shunned, needs to collect their thoughts, find some sponsorship and get a kick save from the Mother Chip (INTC).
- "Jeffrey Clarke, senior vice president of Dell's product group, exercised options for 195,865 shares. Clarke, who sold the stock for a total of $8 million on Monday, currently holds about 58,000 shares, less than a third of the number he sold after exercising the options. Another executive, Rosendo Parra, a senior vice president with the company's Americas division, exercised options for 158,332 shares and sold them for $6.4 million on Monday. Parra currently holds about 228,000 shares. Neither of these executives exercised options that were going to expire anytime soon. Clarke's options were set to expire between 2009 and 2013, and Parra's shares were set to expire between 2009 and 2015. "Holding on to the stock for a year would have given them better tax consideration but these guys aren't willing to do that," says Jonathan Moreland, a research director with Insider Insights." - Barrons, Inside Scoop, March 9, 2005
- The migration to the buy-side and the proliferation of new hedge funds is crowding an industry already mired in supply. Last night, during an old school Succofest, five frisky veterans discussed how the game has changed and how difficult the customer business has become. Whereas "accounts" used to play for points and work with their counter-party, the process has become predatory and painful. That's a function of yield (or lack thereof) and will further manifest as the overcapacity gets weeded out. A familiar theme you say? Yes, but pretending it doesn't exist isn't going to make it go away.
- My take on the Exxon Mobil (XOM) trade yesterday? With the stock trading around $64.35, a large gorilla began "shopping" multiple sevens for sale around the Street. Typically, the customer will offer the stock to several big cap brokers looking for the best "risk" bid. Merrill (MER) evidently won the order by bidding $63 on 14,000,000 shares and, from what I was told, placed the stock with their institutional customer base. As the stock migrated above $63, and as the flippers flipped while others tucked the newfound merchandise away, the (same?) seller came back with another 10,000,000 shares to go. That sparked a supply side ride and punished the customers who were there to help Merrill out in the first place! And you wonder why this business is so tough to stomach at times?
- Tells R' Us! S&P 1195 is the trendline from the October low and the 50-day moving average. NDX 1480 (200-day) remains the line in the sand for tech demand while SOX 420 is Dean Wormer double secret semi support. The piggies will get wiggy if the banks break BKX 99 (200-day) and an avid eye should spy on the internals (best intraday tell), the macro (bonds are a focus, the dollar is broken under DXY 82) and the clock (Intel (INTC) will be a four-letter focus all day and after the close. Whisper expectations are for them to boost guidance.
- Snapper snuck into my office this morning, shut the door behind him and pulled up a chair next to my turret. As I turned to the terrapin, I could tell that there was something on his mind. "I have to admit that I thought you were nuts when you opined that a short-term top was in play," he soulfully said with his hands behind his head, "but do you think there's more to go for this crimson show?" I explained to the tough tortoise that we'll prolly see some four-letter posturing in front of a (widely perceived to be better than expected) Intel mid-quarter and the old school stocks will likely key on the bond action. If the macro variables are stable, the bulls will likely probe the upside. With the "bar" as high as it is for the Mother Chip, however, they'll likely have to blow away estimates to impress the suddenly surly crowd
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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