Aaaaaany Day Now. 7-18-06

Good Evening.

The market provided a little more of the "fun stuff" today (NOT) when it decided to do a whoosh down creating some more panic. Whooshing down at this point in time, from these levels, right in front of numerous catalysts seems like the ultimate sign of immaturity from the Bears. In other words traders who felt comfortable enough to aggressively short today are truly speculators playing a low probability game. Nonetheless, who are we to question anybody else's "machoness". We will say however that the whoosh and subsequent recovery provided a pattern that resembles a potential key reversal day to the upside. Volume was decent and breadth steadily improved throughout the day. The ingredients truly are in place for the tooth fairy to sprinkle a little pixy dust on worn out traders.

After the bell, IBM took the leadership role as a potential technology catalyst by offering a decent report on the top and bottom line as well as guidance. "That's right Virginia - there is a Santa Claus" and not all companies are going out of business. Only Santa Claus is wearing a Speedo in this disgustingly hot month of July (not a pretty sight) and big old boring IBM reports are the goodies he's handing out. Importantly, IBM noted strength in microprocessor demand and their software business. This bodes well for other key players in tech land i.e. INTC, MSFT and the usual suspects. Unfortunately, IBM showed weakness in their service business which may be an aberration versus a recently strong report from ORCL.

Most unfortunate is the after hour reaction to YHOO's stock price simply because they were a little light on revenues. Despite earnings being inline, after hour bozos are taking the stock apart. This may contribute to pressure in the internet space tomorrow but we will be watching for a late day recovery in that sector.

In addition, tomorrow we will have the privilege of listening to Ben Bernanke speak at what used to be known as the Humphrey Hawkins Testimony. What they call it now a days eludes us but most people still refer to it as "What used to be know as the Humphrey Hawkins Testimony".

If You Held a Taser to Our Head:
The market is poised to rally at any time and perhaps IBM, Ben Bernanke, and the hope for similar earnings to IBM's report can provide the fuel. A little release of tension in the Middle East wouldn't hurt matters either. Maybe Condoleeza Rice's scheduled visit along with talk of beefing up Lebanon's army to reign in Hezbollah will do the trick. Does it strike any of you as interesting that only a couple of decades ago, Condoleeza Rice would have not been taken seriously by members in that region to mediate a dispute in an Israeli/Arab conflict? Certainly we can say there has been some progress in that region of the world over recent years. Just saying…

See you tomorrow.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________

Click Here To E-mail Comments