Watch the dollar as a sentiment guage and the internals as an intraday thermometer!
It's a gorgeous day in Minyanville and the critters, after a weekend of fresh air and outdoor activities, are wide eyed, bushy tailed and ready for action. They know that the rubber is gonna meet the road today and clarity, one way or another, should emerge regarding the next step is (and who's gonna take it). Will that be enough to spur the widely anticipated war rally or will the recent strength be viewed as a sell side gift? Take a deep breath, roll up those sleeves, pour an extra cup of joe and ready yourself, Minyans--March Madness has officially begun.
The obvious headliner today is the seemingly imminent war with Iraq and the issue of unity. If there's to be a common ground, today's the day it will be found. While anything can happen and we must remain alert and open minded, it appears, at present, that U.N support will be difficult to garner. The implications of this development remain unclear but it remains my humble opinion that, from a trading standpoint, it's potentially negative. Watch the greenback closely, my friends, as it'll tell the tale for equities.
In company specific news, MHK wet the bed late Friday, Solly cut numbers in MU and downgraded the tobacco group, WEN and AFCE while simultaneously upgrading EAT and OSI. The mighty BEAR upgraded CAH, a few firms were cautious on the banks, Morgan downgraded MEDI, JP Morgan punted SBL and Monty upped HCR while punting MEDC.
Looking ahead, ORCL releases earnings tomorrow, BSC, FDX, GIS and NKE report Wednesday and GS, LEH, MWD and MU highlight a busy Thursday. Elmer Greenspan also makes a Minyanville cameo tomorrow when the FOMC meets to discuss interest rates. It's easy to peg the fate of the tape on the geopolitical landscape and while that's surely the driver, we must pay attention to the peripheral catalysts. Stay sharp!
Tells today include our macro indicators (dollar, crude, gold), the financials (BKX 700 is important), the semis (MU), the generals (GE and GM), the retailers (consumer proxy), the internals and, of course, our levels. S&P 830 (820, 800, 775) provide downside support while S&P 835 (850) offers resistance. In four letter land, NDX 1020 (1000) will act as support while NDX 1040-1050 should be an area of resistance.
I walked into work today with two legs in my metaphorical bear costume (50% conviction on the short side) and conscious that emotionally charged tapes don't always act rationally. My risk remains defined (out to April) and I'll be watching the developments on 46th street closely. IF (big if) the Minx can exhibit upside jig through resistance at S&P 855 and NDX 1050, I'[ll rethink our trading posture. Timing remains the most elusive element of a succesful trading strategy but discipine will always be the common denominator.
Last but certainly not least, today is the official beginning of our much anticipated Minyanville raffle. The holder of the winning ticket, drawn Sunday at Minyanfest, will receive the VIP Oscar gift basket that, until now, was reserved for movie stars and Hollywood moguls! The $100 raffle tickets will go on sale shortly after lunch and 100% of the net proceeds will be donated to The Ruby Peck Foundation for Children's Education. I'll give you the heads up when the raffle office opens but I couldn't contain my enthusiasm in sharing this news---this goodie bag is valued at over $14,000!
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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