Tuesday, February 13, 2007

Morning Market Comment

Minor Rant: Over at the Marketwatch website, which along with the Journal are among my financial favorites (they are owned by the same company) the headline reads: Bernanke in the lion's den. Fed chairman will try to avoid becoming political snack when he testifies, starting Wednesday, before key House and Senate committees for first time since Democrats took control of Congress. True to an extent that the dems, or whomever hold the political power, can try to make the Fed chief sweat, but at the end of the day the Fed, which is really an independent cartel of the nation's largest banks, is far more powerful than the political buffoons. Sorry to be cynical, but Wednesday and Thursday's proceedings are a dog and pony show, with the dems being the dogs and ponies aiming to get the best sound bit to play back at home and Bernanke, the thousand pound gorilla disguised as the submissive Fed chairman.

Another month, another huge trade deficit. If the political underweights who were going to question Bernanke Wedesday and Thursday really understood what the implications are of the TRIPLE trade, budget and current account deficits, they would be taking real action to get the American fiscal house in order.

Alcoa (AA) takeover speculation is brining a little cheer into the markets this morning. Times of London late yesterday reported BHP and Rio Tinto may be interested in bidding. Canada.com cites a source that says BHP isn't interested. But JP Morgan says a deal with BHP{ could happen. Morgan says the AA CEO is disliked (LOL) and AA's value makes it ripe for the picking. Morgan is a buyer into the 40's. As Popeye would say - Faska-nating.

Applied Materials posts eanings this evening. DBAB this morning is telling its clients that revenue will likely track to mid point of guidance booking could track to the low end citing a drop in FPD orders. Deutsche reiterated a Hold. This is going to be very important for the Nasdaq and chips tomorrow... more later.

If GOOG can gain a head of steam today, I will sell my March 440 puts at a profit and wait for expiration regoup late in the week.. In looking at open interest, and I should have done this more carefully last week, it sure looks as if there potential for the stock be run up to $470 since it appears that's where the most puts and calls would expire worthless for February.

Afer Blue Nile (NILE) lowered guidance last night, Caris downgraded NILE to Average from Above Average saying it prefers to buy shares in the low 30's. I will hold my May40 puts to see where we go after expiration.

There are a ton of other Stocks to watch today.

Crude oil rebounds a bit, nat gas off the lows.

Gold rebounds as well. Remember what I pointed out last night - from a historic perspective the short position of the commercials is low enough to signal that a good floor for gold was put in last week... look out above.

Yen and Euro both up.. see dollar comments from last night. 10 year up a tick.

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