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Randoms: Engine Room, More Scream!

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Boo turns the screws to start the week.

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  • Yikes, talk about an expiration hangover! The level of lore (S&P 875) never triggered-the high print on Friday was 875-again bringing to bear one of the oldest adages in trading, "never anticipate the anticipator."

  • The reverse dandruff discussed this morning, it's still "in play" above S&P 800. Please keep that in mind as we edge through the grind.

  • Contra-hour (2pm-3pm EST) should provide a respite to the incessant supply although tapes that are weak all day (with 2:1 negative breadth or worse) tend to end that way. Through that lens, Turnaround Tuesday may be the best bet for the bulls.

  • Think about the energy it takes to smile and imagine the positive pebbles it might produce. That, to me, feels like the best risk-reward in the entire socioeconomic landscape.

  • Chatter abounds that the Turner Radio Network obtained the stress test release for the financial fabric and the results are horrific, with sixteen of nineteen banks "technically insolvent." While that could conceivably prove true, please know that this particular report has been verified as FALSE. We typically don't comment on rumors but wanted to share the fare for those that care.

  • Thanks to today's lower opening, we now have gapsters on both sides of our current ride, as evidenced by the 10-day FAS chart. A move above $8.25 would "work" to $9.70 while a dip below $7.35 "works" to $6.35, so you know.


    Click to enlarge


  • If we fill that gap into the close, it may be a decent set-up into Turnaround Tuesday. We'll be noodling that in real-time on the Buzz & Banter as we do every day. It can't hurt to take a 14 day FREE trial.

  • In terms of dry eyes in the crimson dye, Morgan Stanley (MS) and Amazon (AMZN) both act particularly well in front of their respective earning reports this week while Halliburton (HAL) trades well with numbers in the rear-view.

  • Udder eyes? A stronger dollar (a headwind through the big picture lens), firmer gold (again, defined risk is your friend), a bid to the traditionally defensive pharma complex (watch consumer non-durables) and 8:1 negative breadth (it's early, particularly with the expirations hangover in place).

  • With major media and the mainstream press screaming about the "great" earnings by financial institutions, I, for one, am glad to have the incredible insight from Minyan Peter. And I quote:

    "As an appendix to "The Hole Truth", I would offer the following quote from Bank of America's (BAC) results this morning:

    Noninterest income included $2.2 billion in gains related to mark-to-market adjustments on certain Merrill Lynch structured notes as a result of credit spreads widening.

    For non accountants, the translation of this statement would be "Because the market is now more doubtful of our ability to meet our obligations on these structured notes than they were at the end of December, we can recognize a $2.2 billion gain this quarter." And to those wondering, BofA was hardly alone in reporting sizable gains due to spread widening."

  • Home and home? Minyan Michael Sedacca, the up-and-coming son of our fallen friend Blue Steel, will be hitting the big city with his gal-pal Fire Engine Red tomorrow. They'll be staying at Chez Harrison and we've got all sorts of plans in place, which is nice.

  • Breathe, Minyans, for it could be worse. A little perspective goes a mighty long ways these days.


R.P.



In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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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.

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