Congrats to all on making it through another year!
This has certainly been a fun one for us investors and I’ve sure had a great time writing about it. I’m not going to get all retrospective as that’s my job for the weekend but I want to wish a very Happy New Year to those of you who are sensible enough to have something better to do on the weekend than hear what I have to say…
Asia was flat today but Australia closed at a record high. China’s final 2006 growth tally looks like 10.5% and CHL got a little more hope on the long-awaited licenses.
Europe is off a touch this morning but everyone is going home early at this point with not much happening.
I have an easy morning because nothing happened yesterday and we are watching the same downsidelevels as yesterday:
-
Dow 12,480 would be nice to hold, it was the resistance we fell off last Thursday.
-
Transports are much improved but MUST break over the 50 dma at 2,617.
-
-
NYSE 9,140 is our soft spot but I think falling below 9,150 is an early warning.
-
Nasdaq MUST firm up over 2,425 and that is no big deal at all.
-
SOX are a big deal if they don’t turn up! They were at 475 last week – this is pathetic!
-
-
Russell is well above last week’s levels and needs to pass 800 to lead us into a real rally.
There is likely to be a lot of wild selling today, especially in the few stocks that give people a tax loss for the year to offset a lot of huge gains but they have to be stocks you are willing to live without for 30 days, tricky for losers like Intel or SNDK who could pop at any time.
Apple will get a relief rally and we’ll have to decide what to do with our callers this morning so tune into comments for that discussion. Let’s not forget that Apple says Apple’s probe clears executives. While it is highly unlikely they are, at this stage, filing a false report with the SEC, anything can happen so let’s just not go crazy and overpay our callers.
Oil continues to slip in European trading, even as the dollar slips further (as dollar calls seem to be something people can live without for 30 days). WTIC looks like it’s trending down to everyone but the analysts on CNBC (Can Not Be Confirmed) and I continue to be amazed at the amount of people willing to go on the record pretending that oil (and now Exxon) is still in rally mode. My guess is that, along with the dollar, the price of a soul must be nearing its all-time lows!
We’ll keep an eye on oil as we head into the long weekend and it will be a very bearish sign if they fail to get back over the $60.80 mark, especially if the dollar continues to face it’s own resistance at 84.
As I’ve said before the flaw in most people’s analysis of oil is that they accept forced (pumped) data points as real and plot the trends the manipulators want them to plot. Oil has been artificially supported by traders, a parade of oil bulls on CNBC (Causing Numbskulls to Buy Crude), OPEC, Nigerian Rebels, the Swedish Government, the Russian Government AND the Russian Mafia, Iraq, Iran, T Boone… who have all been spending every single day since 9/11 trying to keep oil over $60 – and this is the best they can do?
People worry about where the next wave of capital will come from to fuel the rally in 2007 but I think we may get to shake our own tree as several Trillion dollars of misdirected funds may find their way out of commodities and make their way into companies that grow and produce revenues rather than pouring it into the stuff than things are made out of. 2007 may indeed be the year that $1-2T moves up off the bottom of the value chain and finally gets to work in the markets.
====================================================
No trades, let’s just relax and have a happy new year!
CEO is a big company ($40Bn) but their parent company, China National Offshore Oil, is much bigger (unlisted) and has announced plans for 16 major projects in the South China Sea next year. At least one oil company is seriously exploring!
Hopefully we can end on a posiitve note but the battle is already won for 2006, we are still waiting to see if the NYSE is even open Tuesday (due to Ford’s funeral) and I may pick up a few DIA $125 puts to cover a catastrophe (as 12,500 should be slow to pull away from) but, as I’ve said, these are faily light positions and there’s no reason to run out as long as we hold our levels.
T should get a nice jump as they move forward with the FCC on the BLS merger.
Have a very happy new year one and all!
– Phil
