"Street Critique"-Todd Harrison, CEO of Minyanville.com
Thursday, November 05, 2009PAUL KANGAS: Tonight's "Street Critique" guest says he respects the market's uptrend, but he still sees problems ahead. He's Todd Harrison, founder and CEO of Minyanville.com. Welcome back to NBR Todd. Good to see you.
TODD HARRISON, FOUNDER & CEO, MINYANVILLE.COM: It's great to be here, Paul.
KANGAS: You've been bearish in recent visits but we're still headed higher, much higher today. What's your take on this current market?
HARRISON: Well, I am looking at the market through a technical context, Paul. And looking at it through that lens we broke the uptrend in both the S&P and the NDX, the uptrend from the March lows. We broke those and have been trading sideways since then. This past support is future resistance. S&P, 1075 and NASDAQ NDX 1750 should be a resistance level, resistance levels in the marketplace.
KANGAS: Now you brought along a chart so we can graphically see the technical breakdown on the Standard & Poor's 500. What is it telling investors?
HARRISON: They say the trend is your friend and this is one context with which to measure risk. I'm looking at this once we broke support. Now it becomes resistance. And if we get back up through it, then we are looking at 1120 on the S&P which is a level I have been eyeing all year. That is the downtrend from the highs in October of 2007. That's a 50 percent retracement of the entire decline and that too will serve as resistance. So we have some layered resistance in the S&P and on the NASDAQ and I think that warrants a little caution going into year end.
KANGAS: Tell us a little bit more about the NASDAQ tech heavy. Speaking of tech we heard some very upbeat comments on the economy from Cisco's chief Executive Officer John Chambers. What do you make of his optimism?
HARRISON: Well, you know, I think fundamental analysis is yet another metric and it's one metric. And I think that warrants respect. But you know, I don't think that the financial crisis has necessarily disappeared. I think it's simply changed shape and it is entering into a new socioeconomic realm, if you will. You know, and that I think warrants caution as not necessarily on a trading basis, but just through a broader lens. I think Paul, one of the great misperceptions in history is that the crash caused the great depression when it reality, the great depression caused the crash or social mood and risk appetites are what shaped financial markets. And I think that is going to continue to continue for a while for the foreseeable future.
KANGAS: We just have 30 seconds left, but has crisis really changed our habits when it comes to money?
HARRISON: Well, I think so. And I think that this is, we've entered into, from an age of conspicuous consumption into an age of austerity. And I think spending habits and social mood again are changing. And I think that is a process. It's a prolonged process. If you look at what has gone on over the last 10 years in the market, it has been pretty stagnant overall. There is going to be great rallies. There's going to be pretty nauseous declines but I think capital preservation is going to serve investors in great stead. Once we get through this, there's going to be fantastic opportunities. We just need to go through it to get through it.
KANGAS: OK, Todd, thanks for sharing your insights with us.
HARRISON: Paul, congratulations on the lifetime Emmy award achievement. That is fantastic.
KANGAS: Thank you, my guest is Todd Harrison, CEO of Minyanville.
