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Don't Be Lulled By a Seemingly Tame Market

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Buckle in and bear down, Minyans, it's going to be a long road.

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This content was originally posted yesterday afternoon and is reposted here for the benefit of ye faithful.


Lunch Meat! - 12:57 PM

  • The Thain is Spain falls Mainly on the Stain! OK, so Merrill (MER) got itself a brand name CEO. That's a good thing, rumors that he's going to extend hours for all employees notwithstanding.

  • But seriously, and this is an important point, the derivative machination, coupled with the fact that most of these off-balance sheet issues THUS FAR have been related to residential real estate only, makes for a steep learning curve on the subject. Good luck, young man.

  • I've done less trading and more waiting today as I eyeball some levels and exercise my right to practice proactive patience. Plus, I'm outie tomorrow and Friday so I'm not keen on slapping on too much risk when I'm not there to obsess about, er, monitor it.

  • Tell Check? Thataway... mixed nuts abound, although I will offer that if Google (GOOG) and Goldman (GS) get their acts together (either way), it could tilt the screens. S&P 1490 remains the level of lore although expiration influences continue to keep 1500 on our radar.

  • This face for radio is doing some Happy Hour on F-O-X Business tonight. Just setting the table for the critters to blow it out on Friday, as they do each week.

  • As always, I hope this finds you well.



Petty Differences - 2:20 PM

  • So, I guess it really comes down to musical preference. Will Hoofy get his groove on or will Boo stand his ground into S&P 1490-1500 with expiration looming large on the radar?

  • This is where technicals are a useful context with which to define risk. Yesterday's rally served to alleviate the oversold condition but until that zone (and BKX 101) is overcome, Boo deserves the benefit of the doubt.

  • Especially if the dollar catches a bid (note the steady grind higher off the lows today).

  • Mr. Practical is as good as it gets. So when he speaks to the real reasons behind Turnaround Tuesday, I pay rapt attention. The last few paragraphs particularly stood out.

  • So it's said, I would be genuinely surprised and supremely impressed if Goldman doesn't eventually take a write-down. If and when it does, however, it could severely ding the collective confidence. Remember, many of these players claimed safety when the whole sub-prime mess started to manifest.

  • With the market relatively tame (don't blink), I'll again note the extreme tension that was so very prevalent over the last few rocky weeks. The societal acrimony speaks to the chasm between the "haves" and "have nots" and, for many, we're already in a recession. Buckle in and bear down, Minyans, it's going to be a long road. We'll get there together but preparedness will go a mighty long way.

  • Capital preservation, debt reduction and financial intelligence. Swell.



It's a show about nothing! - 3:32 PM

  • Today's net/net? A deep breath, and a well deserved one at that!

  • Unless, of course, you consider the massive downside reversal in Google, which has since dragged Apple (AAPL), Baidu (BIDU) and other beta into Red Dye, worthy of a mention.

  • Applied Materials (AMAT) reports after the bell and, while earnings sometimes serve as binary events, it's worth noting the $20 level, both in terms of resistance and with regard to pin risk on Friday.

  • Pep's Buzz on Macy's (M) is pertinent. I mean, it's Macy's, which is a galaxy away from sub-prime. If it's talking about pushing a billion dollar buyback into next year due to credit conditions, it speaks volumes about the breadth of the current contagion.

  • Remember, sideways action above support is called basing. That same action under resistance is called churning.

  • Every time I write the word churning, I think of that old Smith Barney commercial. "We make money the old fashioned way. We chuuuurn it."

  • I'm gonna jump and juggle--or hop and hobble--as I get ready to shed the jeans and tee for something more befitting media. I mean, if I have to listen to one more Minyan lay into me for that black sweater!

  • Lemme take this time to wish ye well into November expiration. May peace be with you!


R.P.


Holiday Festivus is here! Come join us and support the Ruby Peck Foundation For Children's Education at an old-fashioned Southern-style hoe-down in the heart of New York City on December 7th. Click the image below to learn more!

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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 todd@minyanville.com.

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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