Monday Mop-Up

Well I said in the morning that up would be good and, pathetic as that was, it was up.

There was nothing very sexy about the very meager gains eked out by our major indices in what was generally, as expected, a very indecisive day but we do have some greens sneaking in:

As usual, we are being held down by the SOX but the Nasdaq is starting to do a good job of ignoring them and making a little progress.  We’re doing all this after some poor economic numbers and with about the worst Iran environment we’ve had in quite some time so I think it’s amazing we’re holding up at all.  Like I said, the real trading should start tomorrow.

Oil was flat, failing to break $66 but that didn’t deter oil stocks from making another round of fairly solid gains.  If $66 forms a real top here I think the markets have decided they can live with it so we’ll have to watch the transports closely tomorrow.

Last Monday or was under $63, up 5% from the week before.  Here we sit up another 5% yet all we have is the usual barrel shuffle over at the NYMEX:

• May open orders have dropped 9Mb to 358M
• June open orders are up 21Mb to 192M
• July open orders are up 9Mb at 75M

So a week of trading, a 5% gain in price, just to add 21M barrels over a 3-month period.  Trading volume yesterday for those 3 months was 418Mb worth of contracts, all to move less than 4M barrels from one month to the next – sort of the energy trader’s version of April fools but they can keep it going all month and we are the fools for allowing this to continue.

Gold gained $2.50 to finish at $671 on their new (June) contract but gold traders are very worried that peace may break out so let’s keep our fingers crossed for something really awful to happen and help these guys out!

Something awful already happened to the dollar and I’m not sure anyone is going to help us out.  The dollar has now pretty much spent a week on the wrong side of 83 and may be getting the mandatory 8 count from traders who will now need some real convincing to get behind the greenback.

Fed Governor Bill Poole found it necessary to shore up the dollar yesterday as it tested 82.5 by commenting: "The U.S. central bank’s main concern remains inflation and he could be inclined to raise interest rates if price pressures did not abate."

He also gave some interesting instructions for interpreting the Fed:  "Chairman Greenspan often wrote with the expectation that people would read between the lines," he said. "Chairman Bernanke is trying very hard to have people read the lines and not draw implications from reading between the lines."  Now if we can only figure out what he means by that, we may be on to something!