Bernanke

by Larry Levin

Perhaps the market's light volume during the prior three trading days was due to Bernanke's speech today; waiting on words from on high to save the market. If so, he did not deliver. Mr. Bernanke gave it to Mr. Market straight, but Mr. Market didn't want to hear it...so he sold-off. In essence, Bernanke downgraded the economy.

"Stocks are down today because they've been up three days in a row, and Ben Bernanke downgraded the economy. The market has been looking for a reason to take profits and here it is, laid out on a silver platter on live TV," said Art Hogan, chief market strategist at Jefferies & Co.

Mr. Bernanke's comments shouldn't be new; we already know this, don't we? Then again, I suppose Pollyanna & Friends needed a reminder. "The outlook for the economy has worsened in recent months and the downside risks to growth have increased," Bernanke told Congress. "To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so."

The death of the oil market rally has been called at least a dozen times in the financial press - most recently last week. Today's rally has once again surprised them. Can't ANYONE in the press come to grips with a trend? Crude for March delivery rallied $2.19, or 2.3%, to close at $95.46 a barrel on the New York Mercantile Exchange, surprising the press once again. Meanwhile, March natural-gas futures closed up 38.4 cents, or 4.6%, to $8.772 per million British thermal units. Thank Greenspan this isn't inflationary!

Has anyone notice the bond market? I mentioned days ago that we should keep an eye on it - for it looked to me to be reversing its amazing trend. Since then, bonds have plummeted nearly 400-basis points! And this drop in prices is kicking up yields on the long end of the curve. Said another way, even though the FOMC is cutting rates...30-YR mortgage rates are going up.

I hope this helped as well, "Although the market's volatility has increased from a few days ago, it isn't all that impressive. And which direction is the market traveling during this less than impressive tape? It's going up; and what's more, it is going up on less and less volume. This doesn't mean a change in direction must happen, but is surely makes it easier...much easier." Putting this in print helped me make like Mortimer in Trading Places and sell, SELL, S-E-L-L!!!!

Real Time Trading Signals*for

Trade Date: 2/14/07

E-Mini S&P Trades*
(before fees and commissions):

1) V-A sell @ 8:55am at 1367.00 = +1.00 & b/e

2) 80% sell @ 9:25am at 1367.00 = +1.00 & +9.00!!

3) OTF sell @ 11:15am at 1358.25 = b/e & -2.00

4) V-A buy @ 11:40am at 1357.50 = +1.00 (1 lot)

5) IDVA sell @ 1:05pm at 1356.25 = +1.00 & b/e

6) FT sell @ 2:00pm at 1351.50 = +1.00 & -1.75

7) V-A sell @ 2:15pm at 1357.50 = +.50 & +1.50

8) S1 buy @ 2:45pm at 1353.25 = -1.50 (1 lot)...+$537.50

E-Mini Russell Trades*
(before fees and commissions):


1) Sell @ 9:00am at 721.4 = +1.8 & +.5

2) Sell @ 9:19am at 720.9 = -.8 (1 lot)

3) Sell @ 9:47am at 718.6 = +.5 & +1.0

4) Sell @ 11:13am at 709.5 = b/e (1 lot)

5) Buy @ 11:40am at 709.5 = +.2 (1 lot)

6) Sell @ 12:30pm at 707.7 = +.3 & -.3

7) Sell @ 1:35pm at 707.9 = +1.6 (1 lot)

8) Sell @ 1:53pm at 705.1 = +.5 & b/e

9) Sell @ 2:12pm at 706.9 = -.3 (1 lot)...+$500.00


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