Tuesday, January 9, 2007

Evening State of Play

The dollar is strengthening enough tonight to take the March Euro contract just a hair below $1.30. $1.2950 would be the next support area. This corrective action could take some time until we get a better sense over when the 1st U.S. rate cut will come and when the next rate hikes out of the ECB will arrive.

With the Euro down 46 points, gold is giving back about $1.70/oz tonight.

Crude has taken a breather from its big bounce back from $53.875 early Tuesday. It's down 4c tonight at $55.60. WTI could easily find itself back at $58 if the API figures Wednesday show further draw downs in crude or gasoline stockpiles and $58 would easily put $61 back in play. With everyone realizing that seasonable temps may stick around longer than a few days, nat gas is up another 1% tonight. I am long crude futures and have been since mid Tuesday afternoon.

Dow futures down 12 tonight, Alcoa (AA) earnings better than expected, but what does the company do for an encore if those earnings were on the UP part of the cycle? Stock up less than a buck after hours. The real spoiler is Chevron (CVX), warning of weaker than expected results for Q4. It's amazing that some economists have had the nerve to say the housing market is bottoming... Not according to the latest from D.R. Horton and Meritage. This as PR's Popular exits the subprime lending businessXML.

Major Asian markets are also lower by around a half-percent.

Zen's Market Insights and his 'Options Sentiment' should be looked at: http://zentrader13.blogspot.com/ and check out my earlier comments about March S&P futures closing below key support today. IF crude found its bottom yesterday some rougher sledding may be in store.

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