Random Thoughts: Frankenstorm, GDP, Apple, and Amazon
The perfect storm on Freaky Friday!
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
It’s a Freaky Friday in the City of Critters as we juggle economic data (GDP beat expectations, but let’s be honest folks, 2% quarter-over-quarter growth, despite $15 trillion odd reasons for it to be snazzier, leaves a lot to be desired), earnings (Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) both missed, but the reaction to the news is always more important than the news itself), and the widespread fear of Frankenstorm, which sets us up for a wild and wacky session next week.
Before we dive into today’s Random Thoughts, I would like to update y'all on three critical inflection points in the S&P (INDEXSP:.INX), the NDX (INDEXNASDAQ:NDX), and the VXO (INDEXCBOE:VXO).
While the flush and recapture of the NDX 200-day (last night following the Apple report) is on-the-margin constructive, today’s close will be entirely more important. Despite the brave face by Apple, Google (NASDAQ:GOOG), and Amazon, we are very close to this all-important support, which has now been tested four times (and gets weaker with each subsequent test).
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The S&P is 30 handles above the 200-day moving average while the VXO is basing above its 200-day. That seemingly supports a press lower, perhaps to S&P 1380, where it will NEED to hold if we hope to avoid an all-out flush into year-end.
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See all sides--and manage risk accordingly. Guessing, pressing, and stressing is no way to go through life, son.
- Remember, Apple fell $100 (14%) into the earnings release.
- Frankenstorm—the combination of a hurricane from the south, a winter storm from the west, and an arctic air blast from the north—is due to settle over the NYC area early next week. That will shape the financial tape--volatility is the opposite of liquidity—and may impact the election the week after (depending on the fallout, power losses, and of course, the political history of the last two elections).
- We spoke about the potential for "Ns over Ss" a few days ago and sure 'nuff, the NDX is out-performing the S&P as we edge through this Freaky Friday. The catalyst? A stiff upper lip in tech (Apple, Amazon, Google) coupled with pink piggies in the financial complex. Call it a tug-of-war, but see both sides.
- Six weeks to Festivus! If you love live music—three rock bands—all-you-can-eat BBQ, top-shelf liquor, and 500 folks that represent the finest human capital in finance and financial media, this has your name written all over it! We'll kick this year's event off by ringing the bell at the NYSE!
- There was a tragedy last night in New York City that hit close to home for those in finance and financial media. I will ask you to join me in sending white light to the family and friends who are suffering the unthinkable this morning.
- That sound you hear is the volatility dripping out of options today as we dance around the flat-line. I suppose that after a 60% pop in the VXO over the last month (true story), some back-and-fill makes sense.
Good luck today and remember—profitability begins within.
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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 firstname.lastname@example.org.
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