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Random Thoughts: Underwhelming Market Reaction


Everyone thought Goldman Sachs was going to save the day.

The following appeared earlier today on the Buzz and is reprinted here for the benefit of ye faithful.

Caught you lookin' for the same thing. It's a new thing, check out this I bring... - 9:43 AM

I was emerging from my post-training shower in the gym this morning (I know, bad visual) when I saw the the top-line Goldman (GS) earnings report. As the other guys standing around the TV said "Wow--what a report" and "My God, they're killing it," I mumbled to myself "Not good enough."

Evidently, I didn't mumble it all that low as everyone turned to look at me. I can only imagine that they were looking because of what I said.

There is a LOT of trading left in the day so it's a bit early to scribe the equity epitaph, particularly given the desperate housewives at the ECB (my sense is that central bank policies may be more of an influence today than one firms earnings, regardless of how Golden that firm is perceived to be).

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Why was my first blush reaction cautionary? Simple---it has more to do with Public Enemy than it does with Goldman Sachs. And I quote... "Don't, don't, don't, don't, don't believe the hype."

Quite simply, everyone--and I mean everyone--thought Goldman was gonna save the day.

And while it's clearly best of breed, fleas abound.

We could see a lift---I actually think the odds improve given this initial probe lower, as long as BKX 88-90 holds--but I wanted to share my thought process with hopes it adds to yours.

Lookin' Pa Nub in Too Many Places - 10:17 AM

OK, so the "reaction to news" (which is more important than the news itself) in Goldman (GS) is underwhelming. It could be worse, I suppose. Google (GOOG) could also be down on the day.

Uhh... OK, so Google is off $10.

But it could be worse...Apple (AAPL) and Research in Motion (RIMM) could be down too. Uhh... hmm. Well, look on the bright side. It could be raining.

Before we get our schvitz in a ringer, remember that there IS a coordinated global central bank agenda in play and, much like last week, the powers that be will do everything they can to defend their actions and make themselves look right. They know, as do we, that an outright failure on the heels of such aggressively publicized efforts would flip sentiment faster than Jessica Simpson at a Cowboy game.

THIS is the probe, Minyans, and with the BKX sitting on the intraday August (multi-year lows), it must hold here if Hoofy is to have any holiday hope.

Stay on ye toes---and for gawd sakes, be careful out there.

Banks A Lot! - 10:25 AM

I know, I know... I'm a fripper (a fripper for real!) but I'm nibbling on the long side in some of these financials with the other side of BKX 88 as my defined risk stop.

Why? I've been waiting for this probe, for one, the ECB liquidity spigot, for deux, and the risk/reward, as a function of that snare drum tight level, for tres.

Plus, I dig Bonnie Tyler on Tuesdays. That's four, however you say "four" in French.

More Answers I Really Wanna Know... - 12:11 PM

  • Seriously, who holds a firm wide management meeting in the middle of the trading day?

  • So, Goldman (GS) is saying that it's too early to get a read on December?

  • Is it scary enough out there yet?

  • With the VXO at 26, flat on the session?

  • Have you read Professor Sedacca's excellent 2008 outlook?

  • Does anyone wanna venture a guess as to how frustrating it is trying to trade without systems (I won't name names... BLOOMBERG!)?

  • Ya'll see the stealth bid emerging in pharma?

  • $500 billion bananas and this is the reaction?

  • Did I mention that I'm dipping my toes in some homies again with an eye towards the reverse dandruff at HGX 240?

  • What's for lunch?



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