Monday, January 15, 2007

Evening State of Play

Stock futures are on the rise following a positive day for most of the major overseas markets. S&P futures are sporting a rise of more than 2 points tonight. A close above 1432 on the cash S&P targets my interest for considering a variety of bullish activities, with of course, tight stops. A barrage of earnings reports are due out this week and those reports could be the catalyst for further upside activity. Zen's Market Insights has interesting insight on what he calls the Speculate-O-Meter...

Ahead of earnings season, Zack's has some interesting thoughts on the coming reports of companies like Apple, Merrill and Southwest (Click Here). I will be watching options activity ahead of these results for any interesting clues and perhaps posting some worthwhile intelligence and doing some trades, though my suspicion with a stock like Apple, which posts on Wednesday after the bell is that a time spread will be the best scenario to profit off the evaporating volatility that will follow on Thursday; a directional play will not likely be possible.

Crude oil remains wedged between $52 and $53 bbl tonight. No "emergency" OPEC meeting was called over the weekend and Platts reported that the OPECers have been oversupplying the world market by close to 1 mln bpd. Nigeria's oil minister said that the world oil markets are "oversupplied". One can only wonder why there hasn't been an "emergency" meeting. I sure think there is more to this than meets the eye. Remember, the Saudi Kingdom is Sunni ruled and under their breath they hate the Ayatollah Shiite ruled Persians (Iran) and secretly wouldn't mind if Israel whooped the hell out of Iran. I can't help but to wonder if there's some sort of Saudi cooperation going on with the West to attempt to destabilize Iran by pushing crude down, down, down. We'll see. Of course, OPEC members especially hurt by lower crude prices can always brew up some sort of situation in that part of the world to cause sudden volatility in the marketplace. There is no surefire up or down scenario, but something seems amiss with the loudest production cut demands coming only from the nuttiest of the OPEC memebers (Venezuela and Iran). Think about it, the Saudi's have much to lose if the radical Shiite agenda dominates the Middle East region via Iran and so does the West for that matter. As noted earlier in the weekend, there's more talk about the possibility of the market seeing $40 crude. That's a number that would cripple some exporters including Iran (the #4 OPECer with little downstream ability, so little that it imports gasoline).

Ok, enough political theory. For now, crude is down 51-cents as it seems heavier duty selling pressure has dried up with crude appearing to be quite oversold.

Natural Gas is up another 11-cents at $6.73... I'd become more bullish on a move above last week's high at just above $6.80.

Gold, little changed, at $627.

The March EuroFx is up 5 points at $1.2965.

Nickel rose $780 to $33,150 as stocks in LME warehouses dropped by 240 tonnes to 5,676, with only 4,200 available to the market. Perhaps the better news with nickel is that rebalancing of the Dow Jones-AIG Commodity Index is coming to an end on Tuesday. Big double top resistance awaits at $34,000, but fundamentals sure look bullish and this is going to be a much better distraction, at least for me, than chasing the stock market.

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