..It all makes sense!
Tuesday, September 23, 2008 at 08:15AM Yeah, right!...Nothing really made sense today, sure after Friday's and 1 hour from Thursday of huge gains, we expected a pullback of sorts, but nobody envisioned the market would give all of Friday's gains amidst all the happenings that should have been positive for some sectors. If you told us a huge short squeeze in Oil ahead of Oct. expiration, a tumbling record day $USD would not at least boost Commodity stocks to a decent close, we'd say you're nuts!. Sure, a surging Oil and a declining $USD isn't good for the broad averages, but when one of the events is a very positive buyback from MSFT, you would not expect the NASD to give away over 4%, would you?. Anyways, we don't have an interest in Techs as we've been saying due to earnings concerns this Q, but the action in commodity stocks that we're looking/ expecting for was very spotty in all the groups. Once again, the trading ranges were insane. A look at the coal stocks and you'd think we were back in the twilight zone from last week... lows to high spreads and everywhere in between swings intra-day, WLT $62- 69.4, MEE $42- 48, JRCC $31.5-36.5, ANR $63-71.... Throw in the fact most of the stocks gave up their gains after the afternoon Oil spike and you may feel demoralized trading these stocks. As disappointing/ confusing as it was, we still believe in slowly building up positions into autumn, primarily Coals, Ag's- Chemicals. We still don't like Steel because of pricing pressure, we noted recently. The Coals, Ag's do not have the same symptoms and we'd start looking here to start.
It's unrealistic to think this tainted market was going to give the all green- buy the market signs right away. It will take time to see stabilization and confidence come. It will not occur overnight and it shouldn't. The faster the haggling over details in the rescue plan ends, the better it will be for all. This plan has implications all around, commodity related as well. This is the new thing to deal with now, volatility coming from whatever the sentiment is like coming from Washington.