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This will be a huge week for both earnings and data (and thanks to Kustomz for getting this calendar started!):

Monday

• Dallas Fed Mfg. Index (10:30), Chicago Fed Index (12)
• Earnings from ATHR, CX, CMI, MAT, MSTR, PD, PCL, SGP, STN, TSO, TSN, USG, VZ and ZMH.

Tuesday

• ICSC Store Sales, Dec Personal Income/Spending, Retail Sales, Consumer Confidence (10 and 5 - 2 flavors) and the Fed meeting begins!
• Earnings from AFL, ALL, AMLN, BDK, BXP, BKC, CP, CME, CB, ITW, JBLU, JNPR, K, MMM, MRK, MTU, PACR, PG, SII, SNE, SNDK, UPS, WBSN, WYE and X.

Wednesday

• Economic: Q4 GDP (was 2%, looking for 3.0%), Employment Cost Index, Chicago PMI (10), Construction Spending (10), Weekly Crude (10:30), FOMC Policy (2:15)
Earnings from AL, AH, BA, BOT, D, EXP, EK, LLY, GILD, GOOG, HES, HLT, HMC, HYDL, JDSU, KFT, NMX, NYT, OXPS, PEG, PHM, SBUX, SLAB, SUN, TWX, VRSN, and VMX.

Thursday

• Jobless Claims, Personal Dec. Income/Spending. ISM Index (10), Pending Home Sales (10), Business Barometer (10), Money Supply (4:30).
• Earnings from ACTL, ADM, AMZN, BUD, CA, CELG, CMCSA, CVS, DB, DLB, DNB, ERTS, ENI, FSL, GNW, HP, IMO, IP, ISRG, IOM, MHO, MC, MNST, MUR, RACK,.RTP, RDS.A, SGTL, STA, UA, VLO and XOM.

Friday

• Nonfarm Payrolls, Unemployment, Hourly Earnings, Factory Orders (10), Consumer Sentiment (10)
Earnings from ACI, BAB, CVX, ERIC, FRK, GCI, HND, ITT, NYX, OSK, VOLV and WEN.

Now that’s a busy week! Both Asia and Europe are frozen in their tracks waiting to see what the U.S. will do so don’t expect any direction there…

Gazprom will spend $20Bn on energy development this year, much more than XOM ($12Bn), CVX ($10Bn) or COP ($5Bn)! The Russians are employing an interesting strategy of actually looking for oil and gas AND drilling for it when they find it to boost revenues and earnings. This is contrary to the US big oil strategy of not looking for oil, constricting supply, not paying taxes, leases, or lawsuits and buying back shares of the company… Don’t worry though, they’re learning - they just held the gas supply hostage to negotiate higher prices, much like CHK did when they cut production in the fall!

Our markets could still go either way but by tomorrow we should get solid enough earnings to either give them a push up or let us know it’s time to throw in the towel. I suppose we’ll have to wait for Google and the Fed on Wednesday before we’re sure.

We are in a dangerous, weak position at the moment, anything down is terrible and these levels are a must to even consider bullish plays:

• Dow needs to pop back over 12,500 without looking back and head back to 12,600.
• Transports must retake 2,750..
• S&P gets another chance at 1,440 but it has to pass 1,430 first!!
• NYSE still needs to top 9,200 for us to feel secure
Nasdaq is 2,450 or bust! Last week it was 2,475 or bust and we busted so this is double down for the Nasdaq and they’re running out of chips!
• The SOX actually got us over 460 on Friday and now they have to do more than hold it, the 50 dma is 475 and we MUST break it for the markets to rally.
Russell CAN'T have any more trouble with 790 - this time I mean it…

Let’s watch our DALRQ calls for signs of life as LCC is raising their offer by a cool Billion to $10.8Bn!

US Markets 29 01 2007 Chart

With the rising economy and continued employment strength a Fed cut is looking more and more unlikely but this is really good for stocks as it chases people out of bonds and gives a boost to the dollar. Remember what chaos we are looking forward to if we can get the dollar past that critical 85.35 50 dma level as 80% of the planet has been shorting the dollar for a year - that’s a lot of unwinding ahead!

$55 oil is still the price to watch with continued nuclear news from Iran and some actual cold weather. OPEC is finally going to go through with the production cuts they promised in November which is now just the normal scaling down they do for the slow spring demand. $54.60 should be our genuine point of resistance with $54 offering weak support below it. $53.23 is our downside target for the week so don’t be greedy if we get a good drop!

For oil to prosper the fear must be real (as opposed to CNBC hype) and gold holding $650 would be our best sign of that. If the dollar pops, it will be over for oil and gold (and copper and zinc….) so get ready for a very exciting week.

Oil Dollar Gold 29 01 2007 Chart

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Ted Kennedy Jan 29 07

Kudos to Ted Kennedy for gettin' really pissed off in the Senate last week and making one of the best speeches I’ve heard in a long time!

The Republicans have tied up the minimum wage debate for 5 full days in the Senate and nerves are getting frayed and Kennedy blasted them from the floor on Thursday:

"What is it with Republicans and their refusal to help the working class?"

"Do you have such disdain for hard-working Americans that you want to pile all your amendments on this? Why don’t you just hold your amendments until other pieces of legislation? Why this volume of amendments on just the issue to try and raise the minimum wage? What is it about it that drives you Republicans crazy? What is it? Something. Something! What is the price that the workers have to pay to get an increase? What is it about working men and women that you find so offensive?"

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We’re spending this week getting out of existing positions but next week will be a pick-filled week as we get the bulk of earnings behind us and can start picking up the stragglers. As usual there will be lot’s of intra-day trade alerts as opportunities are bound to arise but let’s let the market train pick a direction before we jump on the track as mistaking the front for the back can be very unpleasant!

BRCM did not infringe on QCOM patents! Those two should head in opposite directions…

Our EXPE calls (1/5) should get a boost as they lock up a deal with WMT.

PD had huge numbers - watch the Jan ‘08 $120 puts, they are up too much (500%) to risk! We have to kill them at some point before the buy-out anyway so follow the old adage: "When in doubt, sell half."

SGP had in-line numbers and gave pretty good guidance. Let’s see how our LLY does today.

TSN had blow-out numbers, earning .16 vs. .06 expected. We will be taking a position on this one.

TSO’s Q4 profit doubled on declining revenues, which we should have guessed as pump prices continue to lag the drop in crude by a wide, wide margin.

VZ posted tepid results and DT issued a warning, so that sector is in trouble!

Source: Options Trader: Monday Morning Ideas