As the market comes to what will be the 10th consecutive day of volume less than a billion, it also comes with improving Eco. data. Even though we said yesterday a good GDP will add to a higher move, a move we wouldn't put too much credence into because of low volume, we wonder now if more surprises from Friday's data may just be the ticket for those coming back next week to put some money into the market. Nobody wants to be left out of an uptrend and no matter how inflated, manipulated the data may be, it may be enough to get the conviction (volume) missing soon. Today was interesting as the broader market lifted from GDP, an unexpected turn occurred, Oil dropped instantaneously (3+%) as Nat. gas supplies ballooned to take the wind out of Gustav'. In this market, you have to know what your stocks do and to what data they are vulnerable to. A larger than expected build in Nat. gas inventories and it didn't matter what damage Gustav' may do. Simply, the trade ended a day earlier than how we envisioned it as the circumstances changed, but selling/shorting was still the prudent trade to do. If anything the drop provided a nice entry, but this better be one helluva hurricane in the making to make some money now in these E & P Shales. Unfortunately..by Friday`s close it`s too far away to make that prediction. One short term trade we alerted was in DJIM listed FLS, but that also lost it`s luster with everything else related to Gustav. Still, if Gustav leaves anything in need of repair, they`ll need a plumber or two and playing infrastructure may be a better route than thinking inventories will shrink. Remember, this is not the end, it`s the beginning and these trade ideas will have sustainability into September. It may be lucrative to just hold on and not flip these related plays at every turn. This is up to your own predictions and what your trading style allows. We`re not meteorologists and we know none are on the Forbes list from trading their own forecasts.
The technicals may point to an advantage for the Bulls as we`ve moved above last Friday`s closes on the SPX,DJIA, IWM($RUT). A 4th straight of gains may be too much to ask for, but the data may lead to such. We`d just take a flat day and first hope the data doesn`t turn things upside down again in the morning.
The Russians are coming, Gustav is coming, Oil is leaking, dollar is sprinking, Freddie`s fannie...it`s all too much and it`s the most challenging trading times seen in years....so, please......ENJOY, your looooo-ng weekend!.