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Ecstasy and Irony


Recognize that there's a lot more to this market than top-line levels.


"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us..." --Charles Dickens

Good morning and welcome back to the flickering flack. A new week is here and we're rarin' to go as the critters prepare to reap what they sow. Two of the consistent themes discussed last week--the reverse dandruff in the S&P and the "lower dollar to higher equities" handoff--arrived with a furious fluster on Friday after Beeks cleared the shmear with his employment report. The resulting run was an impressive embodiment of all things bovine--the financials led, the breadth spread, Boo fled, acne emerged and, on cue, the weekend press giggled with upside observations.

I said to television's JeffMacke on Friday, as we noodled some thoughts and prepped him for his Fast Money segment, that the mainstream media has failed to aptly capture the "other side" of this equity trade. Indeed, while the S&P is up roughly 15% since 2002, the dollar index (against a basket of currencies) is off 30%. Does that matter? Not in headline news--it's not the type of discussion that makes for feel-good viewership--but the manifestation of this dynamic has clearly started to make its way into the mindset of Americans.

Two headlines that jumped out at me over the weekend were courtesy of The New York Times. On Saturday, they featured a front page story "Statistics aside, many feel the pinch of daily costs" despite low unemployment, tame rates, still lofty home equity and a strong stock market. Sunday, the Styles section featured a separate story that read "Money changes everything--anxiety about economic differences can strain the bonds of friendship." Two different angles but one very common thread. Despite the ever-bullish headlines, a lurking tension continues to plague many in the mainstream and, as this continues to build, the socioeconomic ramifications will percolate.

Why does this matter and why, prey tell, has it found its way into my weekly opener? Simple, while the technicals (above S&P 1315), fundamentals (quiet period), structural (dollar devaluation vs. asset class deflation), and psychological metrics (performance anxiety) potentially point higher, there are tipping points to each of the legs under our table. In particular, I'm unsure how far the greenback can slip before foreigners balk--remember, everything from U.S treasuries to crude oil is denominated in dollars--and I'm conscious that the elasticity of debt and velocity of money are unforeseen caveats. So while this (higher stocks, lower dollar) could last longer than many believe, I'll ask each Minyan to recognize that there's a lot more to this market than top-line levels.

We power up this Monday pup to find Europe slightly higher, Asia on her horse, energy and metals softer (on Iranian "peace prospects) and the dollar draggy anew. We're also seeing a spate of mergers--Golden West, a position of mine, among them--which should add an early bid to the brokers and, by extension, the financials. I entered Friday balanced with regards to my risk-profile and left for the weekend much the same way. Today, I'll be eyeing volume (weak on Friday, which coulda been a Cinco De Mayo thang) and the rest of our mainstay tells for guidance as we ready for our first fifth of the weekly freak.

In a quick housekeeping note, I wanna keep Minyans in the Mountains III on ye radar as the bill continues to fill. We've got Minyans coming from Canada, Mexico, Sweden, Australia, Europe and from all over the continental United States to join Mr. Saut, Santoli, Shobin, DeMark, Thompson, Dwyer, Deutsch, Perlin, Mallette and the rest of our all-star roster of Minyanville professors. Queen V is leading the charge and, as the rooms will be assigned on a first come, first served basis, I encourage those interested to lock their spot. As anyone who was at Ojai can tell you, our Sundance of Finance is as good as it gets!

Good luck today.


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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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