Randoms: Banks A Lot!
The financials are frisky as they step to the stage
- As financial market participants, we need to be more flexible than a yoga instructor playing naked Twister. Be that as it may, the Meredith Whitney upgrade of Goldman Sachs (GS) (to buy from neutral) following a 100% rally in four months (the day before earnings) is curious to say the least.
- Not that it's necessarily misguided. We've (I've) been saying that this could be Goldman's best quarter in years-looking back and looking forward-but postured that if the stock gapped higher due to rear-view numbers, the forward-looking balance sheet could make for a nice fade (sale). GS 150ish (drawn with a crayon not a pencil) is a level to watch as this script is written.
- As I mused the action in the financials with Television's JeffMacke© this morning, the "easy" upside play was the accumulation of exposure into S&P 875 support (Friday) and in front of the lift into the actual (and widely perceived to be extremely positive) earnings report.
- That doesn't mean they can't continue, it's simply a context with which to view the price action. Until proven otherwise, S&P 875-S&P 955 are the levels of lore. Mr. Valentine has set the price. (And yes, my sense remains that we break to the downside and traverse the other side of the "W").
- Mas Snappage to Editor-in-Chief Kevin Depew and Managing Editor Steve Reiter on their recent promotions. Thank you both for all you do and warm wishes for continued success as we build this beast!
- The Cliff Branch for today's tape are the banks-Bank of America (BAC) is up 7%, Wells Fargo (WFC) is up 5%, GS is 5% higher and JP Morgan (JPM) is up 4%. We know why-perception of blowout earnings-so I'm respecting that in terms of the daily temperature, which includes S&P 875 below and 3:1 breadth inside.
- I continue to trade around Research in Motion (RIMM) with a short bias and it stands out with a crimson pout.
- Should Amazon (AMZN) again edge towards $85, I'll likely use that level as a defined risk ursine backstop anew (despite the fact that I've got a budding love affair with my new Kindle).
- It is Turnaround Tuesday tomorrow. Just sayin'.
- Please be aware-this is extremely important-that overnight technical levels do NOT protect you against gap risk often associated with earnings reports. Keep that in mind as we operate through the lens of "risk management over reward chasing."
- I was hanging with "my brother" this weekend, who is the best pure tape reader I've ever met. We compared notes on the market and arrived at independent conclusions that concentrating risk-focusing on one or two situations at a time-has greatly increased our performance.
- That's what I mean when I say I'm trading with a scalpel rather than a sword (although, take me at my word, the sword is at the ready).
- I "see" General Electric (GE) up a finski and would like to sniff out a defined risk short. Given the stock is still down 70% since we first flagged it, I'm content to watch-not trade-this particular fly at this given juncture.
- I'm pretty excited to see the boyz are back on Sunday night and particularly proud of Minyan Em for stealing the spotlight in the season premiere. Way to hum, sister!
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 email@example.com.
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