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Morning Dew


Always try to see both sides of any trade before assuming risk


So if you wake up with the sunrise,
And all your dreams are still as new
And happiness is what you need so bad,
Girl, the answer lies with you

(Led Zeppelin)

It's a relatively quiet morning in Minyanville as traders edge their way back to the trenches and settle in. A host of companies have released their earnings reports and, with the exception of a few outliers, the song remains the same (solid vs. expectations). Let's take a quick morning walk and see wasabi.

In corporate news, Lehman was cautious on Cisco (CSCO:Nasdaq); Smith Barney sank Carnival (CCL:NYSE) and punted the broadline retailers; Opco downgraded Automatic Data Processing (ADP:NYSE) and Scientific-Atlanta (SFA:NYSE); UBS Warburg upped Cypress Semiconductor (CY:NYSE); Merrill raised Documentum (DCTM:Nasdaq) and Soundview was positive on Oracle (ORCL:Nasdaq). 3M (MMM:NYSE), at first blush, reported slightly better numbers, Merck & Co. (MRK:NYSE) was in line and Whirlpool (WHR:NYSE) flushed guidance.

In world news, the SARS epidemic continues to haunt business on the Pacific Rim and it was reported that cases in China were ten times what was previously thought. Closer to home, public health officials in Toronto have expressed concern regarding containment of the epidemic and, while the global markets are seemingly immune to this disease, we must continue to monitor it.

We enter this week's trading with the bulls holding the baton and the bears on their heels. We all know the upside levels to monitor (S&P 900-905 and NDX 1085-1100) and, while it appears the Minx wants to tickle them, we must always look at both sides of the trade. If we fail, the high level of bullishness and low VIX will be "obvious" tells. If we rally, the "solid" fundies and upside momentum will be the "clear" drivers. Take it one step at a time, my friends, and appreciate both the risks and rewards.

Chief tells today will include the dollar (and the rest of the macro guides), the brokers (and financials), the semis (Xilinx (XLNX:Nasdaq)), the retailers (Wal-Mart (WMT:NYSE)), the generals (GM (GM:NYSE), GE (GE:NYSE)) and our trusty breadth. Lest we forget, Beeks will swing by at 10 a.m. EDT with the leading indicators (expected at -.2%) and, in a thin (long holiday) tape, we must appreciate the potential for increased volatility.

I hopped to work today with one leg in the fur and a smattering of cheapie puts on in the financials. I continue to think that the relative field position of the N's are more constructive than the S's so, should I choose to rent some exposure, that's where I'll likely look. Also, and consistent with what we've been discussing, I think that options offer a cheap alternative (and better risk/reward) than the underlying at these levels (both ways). They're surely not for everyone (high-risk) but, for the professionals out there, that's my honest read.

It's a new week, fresh with opportunity and filled with promise. Let's get this party started right and spring forward with some jingle in our jeans. Just remember -- you're a Mellon!

See you after the opening.
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No positions in stocks mentioned.

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

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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