Play the Bounce While Lovin’ the Slow Death in Oil

Alright mixed earnings put us into “deer in headlight territory.” People will ask should I sell, buy, or short.

My prediction last night was spot on, (back and filling,) until [[C]] lost less than expected. As well Teva pharmaceutical bought out Barr Labs.

[[GOOG]] was okay with crap guidance. [[MER]] plain sucked. [[MSFT]] was pathetic. [[COF]] was crap. [[IBM]] was not that bad.[[SLB]] was good too. [[HON]] & [[MAT]] beat the street.

This will cause us to wax and wain today. Being options expiration we should see extraordinary volatility.

My sense we might test 1239-1244 S&P. A test of this area intraday should provide a opportunity to rally if oil continues its slide. Right now oil is indicating higher.

I feel we get a head fake in oil, and turn up a rally in the indices by late today or Monday at the latest. If we breach 1239 S&P on a close then I feel we must test the intraday low of 1200 from Tuesday.

Yesterday’s rally was helped by oil breaking $130 p/b and or showing us an 11% haircut in two days. Also the IMF stated that all governments would have to fight inflation. This gave some hope to interest rates being raised here in the states.

Looking into the market the Dow Jones Transport Index just went from 4657 to 4915…that is 5%.

The banks are ripping with 20 -40% moves.

Technology has been so so…mind you on this last dip in the market, technology did not get taken to the woodshed unless you followed me into GLW.

Airlines have bounced and the cruise line stocks have done well thanks in part to oil.

So that leaves me to question what about the shippers? If oil continues downward then there should be nice trades here. Be careful of earnings though, as they are probably going to get hit by high energy and some global slowdown issues.

I feel oil could reach $110 -$115 p/b over the next week or two barring bullshit tensions from Nigeria, PBR, and Israel.

[[DRYS]] [[EGLE]] [[SB]] [[EXM]] [[NGK]] [[DSX]] [[FDX]] [[UPS]]

Don’t Forget [[DUG]] [[DTO]] [[VLO]] [[HOC]] [[TSO]] [[FTO]] [[SU]]

I’m looking to buy HK, PVA, CHK, CVX, and XOM 5-10% lower from yesterday’s close. Starting 1/2 of a position.

GLT

by GW

[youtube:http://www.youtube.com/watch?v=VBnkJQWe0JQ 450 300]

 

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