Friday, January 12, 2007

The Long Weekend Ahead

... at least for the stock market, which will be closed Monday for the Dr. King holiday, along with the bond market and commodities floor trading.

There's a lot of unfinished business going into the weekend. I have an open long position in Feb WTI. I reversed my short position earlier in the afternoon after the bears failed to follow through on the 2nd dip below $52 today. I am curious to see what OPEC will do over the weekend, if anything. At the very least there will be jawboning and perhaps an "emergency meeting" called. The most practical reason for today's bounce, crude became oversold.. slo-stochastics sure shows it...

Gold's $13 rally caught my attention. I am long GLD and didn't do anything with futures, but the resiliance of this week even as oil was sent down the drain and with very little inverse help from the dollar makes me wonder what's prompting the gold buying. Why the flight back? Is it just a bunch of black boxes gingerly buying back in after their dump of gold last week like Seinfelf character George Costanza trying to get out of the burning apartment before the women and children had a chance?? If anyone is moving into gold because they smell trouble, it would be because of trouble in the Middle East, certainly not because it's going to snow in the midwest this weekend -- so just another kooky line of reason for me to hold long in crude over the weekend.

Corn surged limit up and was stuck there today. (Read Here). This certainly has inflationary implications down the road. Corn will likely open limit up on Tuesday as well.

Not that I'm expecting to see mushroom clouds this weekend, but did you know that it's getting closer to midnight? Doomsday Clock Hands Being Move Up.

S&P rallied back up to 1430 today, or a six year high and is now only 122 points away from its 2000 high. Major oils actually helped in the advance as crude staged a dead cat bounce from oversold levels. A close above 1432 would get me interested in seeing if the market can make a run another 20 points higher to what would be a resistance area on the charts.

One ingredient that's been missing from the growing bullish enthusiasm on Wall Street is merger mania. We need some big deals to really bring back the totally nutty look and feel. Alcan surged on speculation it may sell a $10 bln piece of itself. There's been the XM-SIRI speculation, but with billions in debt, I'm still not hearing really specific and wonderful numbers from analysts on what shareholders will immediately get from a merger, though XM call buyers are hoping to $20/shr soon.

GE.. wow General Electric. It's clear they are going to buy something. They could get make the biggest purchase of all time. Some analysts who I spoke to today said GE is a company which would easily spend $20 bln to as much as $60 bln dollars, though oddly tjere aren't many companies in that price range available, aside from MDT which would be at the upper end, if GE goes for a healthcare company. had listed these companies, far smaller targets, as possible buyout candidates: VTAL, WAT, MDRX, CAM, FTI, DRQ, ABB, ILMN, IVGN, CERN and ECLP.

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