A Slow Day

by Larry Levin


The S&P 500 opened lower, then traded on both sides of the ledger throughout the day before eventually closing near unchanged. Although there wasn't much action, we had another good day.

The Institute for Supply Management (ISM report) said manufacturers in February logged their weakest performance in nearly five years. Industries that suffered declines included makers of furniture, textiles, machinery and chemical products.

In another report, construction spending plunged by 1.7% in January, the biggest decline in 14 years! Cutbacks covered a wide range, from home building to hotels to highways.

"The two economic numbers that came out today were still rather on the negative side and they point to further weakness in economic activity," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc.

Oil traded at another new high today, nearly trading $104-barrel, before settling at $102.45. Because of this oil run-up, gasoline prices are estimated to reach $4.00-gallon this spring/summer.

The steep pop in oil and other energy prices "hits deeper and deeper into the consumers' ability to spend. With a lot of households stretched by high food prices as well, it creates real problems," said Joel Naroff, president of Naroff Economic Advisors.

Jumbo mortgage lender Thornburg Mortgage Inc. said Monday it could go out of business because more financial backers are demanding additional collateral or repayment on the loans they made. The mortgage lender's shares fell $4.58, or 51 percent, to $4.32.

And Security Capital Assurance Ltd. said it expects to log $1.5 billion in credit costs for the fourth quarter, heightening worries about the health of the bond insurance industry.

In other bond insurance news, Ambac still has not secured extra financing to keep its AAA-rating...but Ambac still has an AAA-rating. It had a 2-week deadline to finalize additional capital but failed and there were no consequences. Friday the 22nd saw a huge late-day rally on news of a pending Ambac bailout, but Monday came & went with no bailout. Result? Nothing. Another week has past, as well as another weekend, and Ambac still holds an AAA-rating. When will this be resolved with new financing or a rating cut? Apparently, the latter will never happen.

Real Time Trading Signals*for

Trade Date: 3/3/08

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


1) B/away sell @ 8:35am at 1328.50 = +6.00 (1 lot)

2) FT sell @ 9:00am at 1325.50 = -1.75 (1 lot)

3) OTF buy @ 10:00am at 1326.00 = +1.00 (1 lot)

4) OTF buy @ 11:45am at 1330.50 = b/e (1 lot)

5) TP buy @ 12:40pm at 1329.00 = +2.50 (1 lot)

6) FT sell @ 2:15pm at 1324.50 = -1.75 (1 lot )...+6.00 points

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


1) Buy @ 9:08am at 683.9 = +3.0 (1 lot)

2) Buy @ 10:42am at 684.0 = b/e (1 lot)

3) Buy @ 11:04am at 685.3 = -.9 (1 lot)

4) Buy @ 2:35pm at 680.0 = b/e (1 lot)...+$210.00


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