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Monday Morning Quarterback: Bulls Put on Game Faces


Bulls shook off a few funky factors to close smartly higher last week.


"Do you believe in Miracles? Yes!"
Al Michaels, 1980

What can you say about the New York Football Giants? They pulled off the greatest upset in Super Bowl history last night, thumping a squad that was widely regarded as the best team in history. Few thought they could do it, including yours truly who declared before the game "I'm rooting for the Giants but if the Pats win, I need them to win BIG."

They played with grit, tenacity and resolve in a performance that will redefine the moxie for which New York City is known. From Justin Tuck to Brandon Jacobs to Eli Manning, who stepped out from behind his sizable sibling shadow, it was a team effort worthy of applause. Mas snappage to Tom Coughlin and his world championship effort. That's why they play the game and what a game it was!

Speaking of Games…

Hoofy had on his game face last week as well, shaking off a few funky factors to close smartly higher. Two weeks prior, we spoke of reasons for optimism and the potential for a stiff lift in the face of abject negativity. That arrived on cue and in the process, shifted the overt negativity to guarded, albeit spreading, enthusiasm.

On the heels of the MLK rate cut, we noted that the DNA of the second rally would speak volumes (leadership, levels and tenor) about the legitimacy of the low. The leaders were a bit bifurcated for my taste (the hardest hit and most oversold) but that started to broaden on Friday. Heck, after 1200 points and 125 S&P handles in two weeks, I would certainly hope so!

This is the twist, and it's a spicy one at that.

We've long offered that S&P 1405 was the level to watch, first on the way down and now as we rally back. The sharpest rallies occur in the context of a bear market, we know, and the cumulative structural imbalances that precipitated the slippage remain very much in place. Indeed, according to Textbook Technical Analysis 101, the time to fade (read: sell) is upon the retest of critical resistance.

For my part and with my money, following a "better lucky than smart" string of sessions, I used the stiff liftage to lighten my load and balance my book. That means getting smaller, for starters, and hedging my remaining risk (select pharma) with some defined risk puts in the financials. Those are stems and seeds, so to speak, as I've got more powder than I do positions.

Please keep in mind that while S&P 1405 is major resistance, the tape can conceivably run to S&P 1450ish and still maintain a defined pattern of lower highs. I'm not married to any mobs either way, although I will again say that my instinct is to sell rallies now that the bungee of discord has played itself out.

Random Thoughts

  • Is there an idiomatic expression for idiomatic expressions?

  • Societe Generale is part of the consortium to save Ambac (ABK), yet the market is hoping that BNP or another suitor will save Society Generale. Pretzel logic in a nutshell, eh?

  • I can't imagine that Google (GOOG) is gonna lay down in the face of Microsoft (MSFT) and Yahoo (YHOO). In addition to the attempts to thwart the deal, my sense is that Google will make a run at a mainstream content concern and, for some reason, the New York Times (NYT) keeps coming to mind.

  • A Minyan pinged me this weekend to ask if a Sovereign Wealth Fund could emerge as a potential suitor for Yahoo! It's not something I considered which, in and of itself, is something to consider. Still, while I sold my position in and around the $28.50 level, I continue to be intrigued by the long side of this ride.

  • Global IPO activity hit a 50-month low last month while the number of takeover bids fell to its lowest level since November 2004. Yet another cause for pause in the financial follies.

  • David Tyree. Insanity.

  • For all you New York City Minyans, MV CMO Charlie Mangano and his Rolling Bones will be rocking at the Red Lion this Thursday night. As always, come one, come all and come for fun. A little levity goes a long way!

  • The Minyanland mojo continues to spread!

  • Have a great week Minyans, let's hit 'em hard and hit 'em straight!



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