by Larry Levin
The markets traded today like a greased anaconda: whenever you thought you had a good hold of the lil' fella, it slipped right out of your grasp. With the HUGE move at the NYMEX, said anaconda was surely oily - not greasy.
Crude-oil futures exploded nearly 5% today to close above the $100 a barrel mark for the first time ever, mainly on fears that OPEC may cut production. Gasoline futures rallied more than 4% to a historic high of its own, moving north on the charts mainly because a Texas refinery was shut down Monday.
Other commodities went on a tear today along with the oil complex. Gold, platinum, softs and grains were all up big today. In particular, Gold for April delivery nearly closed up $24.00-ounce at $930.00 and May Soybeans closed well north of $14.00-bushel.
"Beans in the teens" used to be feared as a sure sign of inflation, as well as the skyrocketing yellow metal. But that's old hat now. Luckily we're blessed with a government that "tweaks" the numbers in such a way that inflation is now a figment of our imagination...all of which is sanctified by the FOMC and Wall Street of course.
Although today's rally will not be accounted for in tomorrow's CPI, the data will give us a clue on the inflation front. Well, not really.
With gold and especially oil closing at such high levels, the bulls just couldn't hold on. It was only when the commodity rally's held at their respective closes did the stock market drop in earnest.
The early tone, however, was quite bullish indeed; no doubt helped by Wal-Mart. Wal-Mart said its fourth-quarter profit rose 4%, driven mainly by price cuts and demand for its grocery, health and electronic products. Although I was a little surprised by the strong 4th-quarter, I was definitely stunned by Wal-Mart's outlook: it gave an earnings forecast range that met Wall Street's consensus at the upper end.
Maybe the President's (IRP) Income Redistribution Plan isn't needed after all? But why would that stop a politician pandering for votes during an election?
"Oops, ummm, we sorta' missed a few shekels in our last earnings report." That statement was surely heard from the powers that be at Credit Suisse. CS reported earnings last week, but today dropped a bombshell - saying it overvalued asset-backed securities by at least $2.85 billion, leading the bank to suspend a number of traders.
Credit Suisse said more adjustments may come as it finalizes the review, and as market conditions develop. Plus, the bank is now looking to see whether it will have to restate 2007 results.
"Disclosing $2.85 billion of losses in structured credit trading just one week after reporting a fairly clean set of fourth-quarter results is impressive proof of zero visibility in investment banks' balance sheets," said Dresdner Kleinwort, analyst at Stefan-Michael Stalmann. He may have also mentioned that if it were not for Credit Suisse's accountants, KPMG, this so-called oversight (oops) would never have seen the light of day.
Real Time Trading Signals*for
Trade Date: 2/19/07
E-Mini S&P Trades*
(before fees and commissions):
1) B/Away buy @ 8:35am at 1367.50 = -2.00 & -2.00
2) OTF sell @ 10:55am at 1359.25 = +1.00 & -1.25
3) FT buy @ 11:35am at 1358.50 = -1.25 & -1.25
4) FT buy @ 12:45pm at 1361.50 = -1.75 & -1.75
5) ENGF sell @ 2:25pm at 1349.25 = +1.00 & b/e
6) V-A buy @ 2:55pm at 1346.00 = +1.00 & +4.00...-4.25 points
E-Mini Russell Trades*
(before fees and commissions):
1) Buy @ 9:28am at 706.8 = -1.2 & -1.2
2) Sell @ 9:56am at 705.5 = +.5 & +2.0
3) Buy @ 11:38am at 705.4 = +.5 & +.4
4) Buy @ 1:27pm at 708.3 = -1.2 & -1.2
5) Sell @ 2:54pm at 702.0 = -1.3 & -1.3...-$400.00
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