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Watch the Commodities Part Two- Results

if they soar today and tomorrow, I am wrong


CAT    75.50/ 77       77.09       wrong.  .09
DE      67.50/ 69       66.57       right     .93
HES    54.75/ 56       54.74       right
XOM   73.75/ 75       73.91       right
APC    67.00/ 70       66.48      right
CAM   45.00/ 47        46.42     b/w right and wrong 75% wrong
SLB    64.00/67        63.89       right   
HAL    33.75/36        34.44      b/w right and wrong 25% wrong

I shorted CAT at 77, sold my HES, APC (shorted), half my CAM at 46 and half my HAL at 34

SnP500 - 1165; DJIA 11,123  (IBM to 181.70)

Light Crude to 82.5
Copper to 3.26

WYNN closed over 130 to 132.5

My verdict;

Another head fake.  Oil is not going back above 90 until it spends some time in the 70's.  It has had only a few days closing below 80 and in order to meaningful drop inflation data, it must remain in the 70's at least 4-6 weeks to insure it only creeps slowly back into the 80's by year end and wintertime.  Today's leap up from 79 to nearly 83 was a head fake.

Copper jumping 10% from nearly a close below 3 is also suspect.  Copper's long term dollar devalued adjusted trend would be about 3.80.  It was above trend by 15-20% for ten months and it will spend at least a couple of months below trend.  It just dropped below trend less than 3 weeks ago.  I will revise my thoughts of it dropping to 2.50 but it certainly can spike lower than 3 and then settle into a little under trend around 3.20.

The Dollar Index has had a steady step up in classic ladder style and again, the Power Elite needs and wants a marginally stronger dollar right now for the closing months of 2011.  Over last three years, peak to trough on the Index has been an average of 14 points ranging from 73-74 up to 87-88.  The last leg up took 6 months from end of 2009 and we are only 2 months into this leg and half way there.  I cannot believe that the Index will not crest 80 and that will happen with the Europe/ China push.

I am bullish but feel strongly the stage is being set for one more drop.

If I am indeed wrong, we will easily see over the next 6-7 trading sessions with improving volume and few spikes, just broad based value recognition and building.  However, the silence this week on other issues indicates to me that another thump is coming.

I am very long like 98%, so I would like nothing more than an uptrending market.  I will buy in early if I see the commodity drop disappearing.