Well Asia was mixed and Europe is up except for France (investors there finally decided that a week of riots might not be so great) so I expect at least a bouncy open in our markets.
Can the S&P break back over 1,300 as easily as it slipped below it? Will the Dow retake 11,200? Can the Nasdaq make 2,400 before it falls back to 2,300??? Direction will be confirmed today so we almost hope oil does do well because a big drop in that sector will likely doom the markets (but $68 oil will doom them anyway so you can’t win).
Huge recovery in oil thanks to the Wall Street Journal and others doing a PR blitz this weekend to whip up a frenzy for the USO oil ETF. What’s interesting about all this is natural gas, which is a commercial substitute for oil, is still going down back to last year’s levels. I still think this indicated that the pumpers have just run out of money from this extended push but I certainly don’t want to bet against it until the Valero Rule tells me to!
Gold also shot right back over $600 so it’s just the American traders who keep selling off. Notice the wacky trading intraday trading patterns of this very painful rally:
http://finance.yahoo.com/q/bc?s=GLD&t=5d
Earnings season starts today with Alcoa and I think they will do well but expectations are high and the psychology is such that a miss might be taken very badly so I am going to take advantage of today’s open to move mostly into cash. I want to give it a couple of days to see how people react to earnings reports.
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Other than watching oil and gold I have little interest in trading today. The closer we get to a 50 point run up the more I want to cash out my positions. If it’s a real rally, there are plenty of beat up stocks to buy with free’d up cash.
RIMM continues down and the $75 puts for .70 make a nice momentum play but this is one dangerous stock to bet against but still up $10 from last option expiration and puts outweigh calls by a mile so there will be a lot of interest in maintaining this price through next week.
RAD posted some good numbers and you would thing WAG would respond as well, especially as their same store sales are up double what RAD is reporting but so far there is no market reaction. I an uptrending market I love the May $45s for .55.
Boo to Apple and Disney for making it so you cannot skip commercials on IPod downloaded shows. Let me get this straight, they want me to pay $1 to see a show on a 2″ screen that is usually free on a 60″ screen and make me watch commercials I would usually skip on my Tivo? No thanks, I’ll just hack them off my DVR for now. ABC will also be offering ALL of it’s shows on-line as well. DIS shares should get a nice boost out of this and the $27.50s are very cheap at .40 (a .40 cent premium).
USO starts trading today, the ETF will trade oil futures, not oil yet the traders are acting like a ton of oil will be coming off the market. The only thing coming off the market will be the bloated contracts the traders are stuck with. Meanwhile the fear mongers are on the warpath. Now they are claiming we are going to use tactical nukes on Iran and Chavez has just kicked our ambassador out of Venezuela so anything less than $69 a barrel this week would be surprising.
SLB is coming off it’s split today with share now trading at $65ish. Movement on these will be very telling for the sector.
PD took a big tumble on Friday while copper jumped to another all-time high. Look for it to correct but probably before the open so nothing to play.
Be very careful out there today – anything can happen!
Good trading,
– Phil
