Hmm, Greenspan calls for a recession and the markets fly up in the futures…
No wonder we have half puts and half calls!
I'm in a bad mood this morning because I sold my Dow $45 calls on Friday. I'm not even going to discuss how awful that timing was! Oil heading higher is also annoying me so keep that in mind if I come across a little grumpy.
Hong Kong was grumpy today too, down 203 points, and most of Asia was off a bit in sympathy but Japan held up and we can excuse the activity as a little bit of catch-up (down) as China was closed all of last week. Miners continued higher as gold broke $690 as Cheney continues his war of terror (a Freudian typo that I'm leaving in!) by visiting Pakistan to make sure that at least those nukes are pointed in the right direction…
Sanyo had a 4% bounce back, which should be a relief to poor GS but the big story there, like it is here, is M&A mania with deals involving Coles, PKX, BEN, MITSY and Consolidated Minerals adding to our own TXU, HBG, DCX and DOW (possible)deals as well as ERIC over in Europe to push today's total to well over $100Bn.
With all that money pouring into the markets you would think we should be heading up from here but let's make sure we are really breaking up before we all go and drink the Kool Aid:
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Dow needs to get back over 12,700!
- Transports need to hold 2,975.
- S&P needs to hold 1,450.
- NYSE needs to retake 9,450.
- Nasdaq needs to break and hold 2,525!.
- Russell 830 needs to be broken – hopefully not until after I dump my IWM puts!
MRK is adding fire to the Dow, up 4% pre market as NVS's competing diabetes drug gets an FDA delay. DD is up 2% on the DOW buyout talk, GM is up a point on DCX talks…
If oil stays over $61 it will be time to quickly revalue those positions but we can certainly expect a test of $62 before we get a turn down. $60.50 needs to hold as a floor and we still have our oil calls from Friday's list if it really breaks out. I'll be watching my XOM Apr $80s to see how much sentiment is really changing (now .52) and I still like them as a cover play at this price.
Gold $690 is now the magic number but we really should be testing $700 again or why bother? The dollar continues to look weak and Greenspan's recession talk certainly doesn't help.
Way too busy looking over existing picks today to make new ones but I will be playing XOM and SU as momentum trades to the upside – possibly some of the other slow movers if we get a good shot but I'd rather take short calls to offset a move than panic out of my longer puts.
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YHOO is making some good noise about Panama – worth watching the $32.50s for momentum…
It should be a fun day!
