Random Thoughts: It's Do or Die for the Bullish Try!
Musings on RIMM, Greece, the fiscal cliff, and 2012.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
After 12 days of challenging living conditions, power was restored to our home on Long Island on Saturday night.
While yesterday it felt like the previous two weeks were a bad dream -- life was seemingly normal again; the weather was superb, our Peewee football team finished the season undefeated, and the Raiders got creamed -- I'm all too aware that any sort of celebration would be in extremely poor taste.
There is still a slew of suffering on the East Coast, which is why we're directing the proceeds from this year's Festivus to benefit educational efforts surrounding children impacted by Hurricane Sandy. Click here to register; it's a rocking good time!
Turning our attention to the tape....
I had breakfast this morning with Frank Boulben, the CMO of Research In Motion (NASDAQ:RIMM). As Minyanville readers well know, I've been trading this stock from the long side (buying dips to sell blips) for the last year, sometimes successfully (catching a 40% move higher last December) and sometimes not so much (getting stopped out for a flat trade a few weeks ago, missing the latest 40% rally).
While I'm compelled to disclose that there may be a commercial relationship in our future, I will also share that I got a sneak preview of the BB10 operating system (which will launch on January 30, per the press release this morning) and it blew me away. This isn't your father's BlackBerry; it's completely revamped, extremely user-friendly, and it has numerous features that can't be found anywhere else.
As discussed before -- when the stock was trading at six and change -- my sense is that this puppy sees double-digits into the launch. The timing of said launch -- January 30 -- helps cement that sense as this stock lost ground in 2012 and fund managers may purge it from their sheets into year-end, much like last year. The "easy" trade, from my perch, is the move into the launch, but that may only be the beginning of the rebirth.
Away from that individual play -- in which I have no position, at present -- we are sitting on some pretty serious levels as we power up for another five-session set.
With last week's election drama in the rearview mirror -- we mapped it in the 'Ville, in case you missed it -- the two top-line topics on the lips of money managers are the Fiscal Cliff and Greece, both of which had on-the-margin positive news over the weekend. The agenda not on their lips, but very much in their minds, is the percolating performance anxiety, and I will again say that the buyers are higher and the sellers are lower.
S&P (INDEXSP:.INX) 1380 (the 200-day) is the level to watch (it should hold the first test) while the "lower highs" (technically negative) remain in play in the semiconductors (INDEXNASDAQ:SOX), banks (INDEXDJX:BKX) and tech (INDEXNASDAQ:NDX). With regard to that latter matter -- the tech tape -- Apple (NASDAQ:AAPL) continues to lead that complex, as discussed Friday morning on the Buzz when the stock was trading in the $535-540 range:
The 200-day for Apple is $594, which corresponds to the 200-day in the NDX at 2664 (2.5% higher). Thus, IF (big if) the S&P holds this zone, a rally back to the 200-day moving averages in Apple, and by extension the NDX, may be the forward-looking trade (before further slippage). See both sides, define your risk, and remember that discipline must always trump conviction.
Corrections -- by definition -- must feel sinister for them to truly be corrections. That's the bull case; the bear case looks something like the "Three Peaks and a Domed House" pattern that was shared on the Buzz earlier, courtesy of Dougie "Don't Call Me Mama" Kass.
With everyone and their Cousin Daryl watching the S&P as a primary tell, we must be conscious of the potential for a “Drop & Pop,” which is the mirror image of a “Pop & Drop.” In other words, the path of maximum frustration may clear out the dip buyers before a rally emerges.
Tells in that regard include the financials (JPMorgan (NYSE:JPM) and Goldman Sachs (NYSE:GS)), which are enduring a process of price discovery following last week’s election, big cap tech (Apple, Google (NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) as performance anxiety proxies, and the energy and metal space, as commodity volatility typically precedes equity movement.
Finally, I wanna share an email that made me smile with hopes that it makes you smile, too. It is from an old-school Minyan in Louisiana who shot me a note; I replied with a terse answer followed by another email, where I said, "I'm sorry -- I'm not myself today." His response is below -- and it sure sums up this nutty strut of a year:
"Why aren't you yourself today? I mean over the last year or so (and these are only things I know about) you got married during a tornado warning, had your first child, took on the raising of two other children, got a wife, lost control of the closet and bathroom because of the marriage, left the life of a rocking bachelor to buy a house in the suburbs only to immediately have a hurricane, something that never hits NYC, whack the crap out of your house and property, then leave you isolated from your start-up business that you have your heart, soul and net worth invested in, a company where people call every day and ask hard questions regarding what they invested in, having people ask you about payroll and new equipment while banks don't do what banks are supposed to do, trying to get back in shape and lose a few pounds because you recently had heart surgery, which said program of weight loss is not working and peanut M&Ms call out to you because like me, you are a stress eater, not to mention breaking your ankle at your bachelor party in an incident involving a midget and some other vague stuff that your wife best never hear about, and getting back to the hurricane, you have a wife and three kids looking to you for answers about the hurricane where your only true response is, 'Hey, this is my first hurricane too!' and the lack of sleep from no electricity and you baby girl crying because she is hurting from a double ear infection and it is breaking your heart and tearing your gut up because you can't take that burden from her, and because you are over 40 and a "boss" who does eSignal commercials, everyone thinks you should have all the answers to everything, and grandpa Ruby isn't here to have your back. Then to top it off, your buddy who lives in Louisiana, whose face you have never seen, someone who you thought would always be there for you, is acting like an insensitive ***** for seemingly no reason at all and is coming off like an inbred, which in your present state of mind, leaves you with only one response to him, that being, 'Well, if that doesn't just top things off?' Did I miss anything? No, I have no idea why you aren't yourself today."
- Good luck and remember that 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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