Shortened week

by Larry Levin


The markets will be closed Monday in observance of President's Day. The shortened week, however, still gives us plenty of time to wade through more economic data. Much of last week's data was disastrous; what will the coming week bring?

Recapping last week's data, we saw several reports fall short of estimates. The first was retail sales - sort of. You see, the headline number of +.3% was "as expected" but when gasoline and auto sales were removed, the remaining sales were awful. There was no doubt about the remaining data points; import prices were four times higher than expected, economic activity in the New York region fell off a cliff, and consumer sentiment was far below estimates. The consumer sentiment reading reached its lowest level since 1992.

Coming up this week are important earnings from Wal-Mart and foreign banks. Wal-Mart's earnings are quite important because we may get another glimpse into how the average consumer is doing. Since spending drives about 70% of the nation's economy, its earnings and outlook will be important. Will Wal-Mart's data be similar to Best Buy? Last Friday Best Buy cut its full-year earnings forecast because of lackluster sales after the holiday season. If WMT follows the way of BBY, it probably wouldn't be good news for the market.

Foreign bank earnings will be important because they too are smarting from the US mortgage mess. Last week UBS recorded a $13.7 billion write-down in the fourth quarter related to its extensive exposure to the U.S. mortgage market. So if the constant admission of bigger write-downs in the financial market continues, it will affect the market. Those reporting this week are Barclays PLC, BNP Paribas, and Societe Generale.

Two other important reports will be the CPI and Philly Fed survey. The inflation data (CPI) will be sliced & diced, then surely ignored. Remember, skyrocketing food and fuel prices no longer count when discussing potential inflation. We will get a look on Friday at the Philadelphia Federal Reserve's manufacturing survey, whose poor showing last month set off alarm bells to many on Wall Street that recession was on its way.

Real Time Trading Signals*for

Trade Date: 2/15/07

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

1) B/Away sell @ 8:35am at 1343.50 = -1.75 & -1.75

2) FT sell @ 9:05am at 1342.00 = +1.00 & -.50

3) IDVA buy @ 11:25am at 1341.25 = -1.5 & -1.75

4) OTF sell @ 12:45pm at 1342.50 = -1.25 & -1.25

5) FT buy @ 1:15pm at 1342.00 = +.75 & b/e...-8.00 points

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


1) Sell @ 8:59am at 698.0 = +.7 & -.7

2) Buy @ 9:18am at 698.9 = +.5 & -1.0

3) Buy @ 9:41am at 700.2 = +.5 & -1.1

4) Sell @ 11:00am at 698.3 = +.3 & +1.3

5) Sell @ 12:44pm at 696.9 = b/e (1 lot)

6) Buy @ 1:17pm at 696.7 = b/e & b/e...+$50.00


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