...a pulse in commodities

Once again the market did the unthinkable 'early on'.    It rallied off more slashing of guidance/ bad news all around, predominately in the tech sector (which led higher).    But, as soon as the SPX closed in on previous days high of 918,  reality sank in or more importantly the 'technical' trade rolled in.    It was just unsustainable off a big move in the previous session , improbable to shrug off more bad news immediately.   SPX bounced off 886 (its 30MA) almost back to 900,  we'd look at this as support in tomorrow's trade and anticipate some Automaker news.

Despite, the closing numbers, it just didn't look like sellers were taking control, more like just buyers petering out after a nice multi day rally.   Basically, it didn't look scary, probably due to no one really wanting be ahead of a pending Auto deal.   The decline can also be attributed to......Treasury yields approach 0%…..Treasuries rose, pushing rates on the three-month bill negative for the first time….The Treasury sold $27 billion of three-month bills yesterday at a discount rate of 0.005 percent, the lowest since it starting auctioning the securities in 1929. The U.S. also sold $30 billion of four-week bills today at zero percent for the first time since it began selling the debt in 2001 (Bloomberg).

Meanwhile,  back at DJIM's ranch our early focus (alert) turned to the E&P's off some positive drilling results on the heels of CHK's liquidity plan from previous day and it continued throughout the day.   We all remember the great, but somewhat short lived trade (3 months) off the Haynesville Shale stocks.   CHK is the dominant name here with smaller caps like HK, GDP, CRK, XCO, GMXR.    Almost all bubbled up as names moved off each others results as in the past.    The broader tape was rather flat as most commodities were down or flat.   This included par performance from bigger energy names which subdued these moves somewhat.  It wasn't the perfect storm,  we hope for a widespread oily move tomorrow to help these Shales along.

Of course,  the biggest moves can be seen in the 'beaten down' under $10 stocks, which comprises almost all shipping stocks.    The moves can be attributed to one piece of news from a single company citing there has been a pick up in activity in Asia re Iron Ore, Coal, Copper, Steel.   Also, bulk shipping rates had rose for 1st time in 14 days have caused some exuberance.   Unfortunately, we keep reading negative headlines at same time,... Nippon Yusen K.K., Japan’s largest shipping line by sales, cut its fleet expansion plan by up to 60 vessels as slowing economic growth curbs demand for transporting steelmaking commodities including coal and iron ore.   We just can't get excited for a turnaround here, just yet,  it is strictly your own decision to trade these intraday at this juncture.

Anyways,   the commodity stocks are showing a pulse,  one look at NUE's (steel) action off guidance today is telling that maybe the market has priced in more than enough bad news heading into 2009.