Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Random Thoughts: Will Earnings Matter?


Traders are gauging results as companies roll out quarterly reports.

  • Is Brickbreaker the new Tetris?

  • Trannies with Acne? Ewww! Unless, of course, you're looking at the Transports, which are back above the neckline of the (bullish) reverse head and shoulder formation.

  • The S&P has a strikingly similar chart, which would confirm with a move above S&P 1405, if and when. I would like this but Professor Cooper has been all over it the last week or so (heckuva call Coops).

  • Even still and until proven otherwise, the three month sideways meander qualifies as a classic (bearish) churn under a few key resistance levels. The fits and starts we've seen are just that. Fits. And starts.

  • Note to self: Never text a Bulgarian black belt after a few glasses of wine to confirm your 6:00 AM training session and end with "Bring it tomorrow-I'm gonna take you down."

  • The VXO (fear proxy) is barely 21? If this puppy can't drink, I don't think the market can drive higher.

  • The Olympic Torch? I'm being told by one of the masters of the universe that China has a staunch agenda not to rock the currency boat until after the Olympics.

  • What exactly do you mean by "rear?"

  • The reaction to news is always more important than the news itself. Not on a one-off basis, per se, but on the aggregate. The market rallied 10% off the lows into earnings. The tone and tenor going forward will speak to the collective psychology.

  • With that said and respected, keep the action in the financials in perspective, particularly as we digest the Merrill (MER), JP Morgan (JPM), Wachovia (WB) and other bank earnings. We're a scant 4% away from major support at BKX 75.

  • Hey, remember Goldman Sachs' (GS) sub-prime gains last year? The guy who led that group is flying the coup.

  • Maybe THIS should be the MVHQ in-house pet?

  • Ted Stroehmann? No, TED Spread! The gap between three-month Treasury bill rates and three-month LIBOR, has widened to roughly 160 bips, the highest since late March. In the days before the credit crunch, the spread was about 35 bips.

  • There was a pretty important story in the WSJ yesterday on LIBOR. Some quick thoughts, for those who have an interest is such things:

    • First, what is LIBOR? It's the London Interbank Offered Rate, or the average interest rate that banks lend to one another.

    • It's a key indicator of health in the financial system, rising when banks are in trouble.

    • Interest rates on trillions of dollars of corporate debt, home mortgages and financial contracts are set on LIBOR.

    • The WSJ article suggests LIBOR may be understated. There are two potential implications here: structural and psychological.

    • Structural: Imagine if California was a metaphorical representation of the financial system. It just suffered wildfires, mudslides, riots, blood, frogs, lice, flies, blight, boils, hail, locusts, darkness and slaying of it's first born. NOW, after all that, there's a warning of an impending earthquake that could seismic shift the underlying foundation.

    • If LIBOR is understated, upwards of $350 trillion in swaps may be valued incorrectly.

    • Psychological: The credibility of banks and faith in the financial system cannot be called into question. Bernanke himself said that a Bear Stearns (BSC) bankruptcy would have led to financial Armageddon, which speaks to the interwoven nature of our finance based economy.

    • Perception is reality on Wall Street and rumor can become reality mighty fast. The other side of financial engineering remains a viable, haunting, ever-present risk.

  • I'll be on the Buzz this morning before stepping to a major high noon meld. In business and in life, there are things we have to do and things we want to do. This particular meeting is about something I've dreamed about since Hoofy and Boo first emerged in my crowded keppe. Dare to dream, Minyans, and one day, they might just come true.

  • Good luck today.


< Previous
  • 1
Next >
No positions in stocks mentioned.
Featured Videos