We did it again at the NYMEX, calling the crooks out in yesterday’s morning post and followed up with my Alert to Members, which was posted over at Seeking Alpha and on our Facebook and Twitter pages but not on StockTwits (more on this debacle later) so those guys missed out on yet another Billion Dollar opportunity (which I predicted we would get on the 9th) as we once again called a huge move in oil with my 9:50 Alert to Members saying:
Europe is down half a point and we are up half a point so something is bound to give. We’re not quite getting to $99 in oil so we have to be patient and wait for a break below $98.50 to re-short the futures (/CL). On USO puts, roll up or DD on Aug and I’ll be liking the TOMORROW $39 puts at .50 on the assumption we get a bit of a sell-off after the nat gas inventories at 10:30 (as they tend to hold up hope until then).
We called their bluff right on schedule at the 10:30 Natural Gas inventory announcement and as you can see from this intraday chart of our beloved /CL Oil Futures, it was a slam dunk for our futures players as well as our option traders, who picked up 250% ($500 turns into $1,750) in just 4 hours! That’s a nice day’s work, don’t you think?
As David Fry notes in the above weekly oil chart – you cannot make this stuff up but, as we noted in yesterday’s post – CNBC makes stuff up all the time! Their blatant misrepresentation of the facts should be a dream come true for a clever class action lawyer – if we can get Uncle Rupert on the ropes, why not focus on the next cog in the great misinformation machine and begin getting back to an actual free press in this country that’s dedicated to truth, justice and the American way (or is that Superman?).
The data we were most concerned about this morning was the Empire State Manufacturing Survey at 8:30 which SUCKED last month with SUCKED not being a strong enough word! Franky, if this one heads lower, we are in DEEP TROUBLE. On the bright side, last month was so terrible (-7.8) that a flat performance will spark a relief rally. We also have CPI at 8:30 and our core PPI was up yesterday, sending gold to all-time highs AND we have Industrial Production and wages, which will highlight the plight of the American worker as they work more hours for less money – which is GOOD for Corporate America (and what else in life matters?). Michigan Sentiment is at 9:55 and that may be an upside surprise depending on what oil was doing when they took the survey (we had that nice dip last month). On the whole, Michigan Sentiment has been pretty bad though:
8:30 Update: CPI came in -0.2% on the headline but, like the PPI, up 0.3% on the core and that, my friends is INFLATION and inflation means you can kiss your QE3 goodbye unless the Fed is truly hell-bent on destroying the World (probably 60/40 odds on that). You can tell this inflation is the evil kind of top-down inflation I have been warning about since QE1 as the Empire State Survey shows ANOTHER 3.76% decline so Manufacturing in the New York region down 11.55% in June and July – is this a bullish premise by even a stretch of Jim Cramer’s imagination?
Still, it’s options expiration day and ANYTHING can happen but our easy bullish premise is shot but we had a nice chance to reload on the spike down on the data and now we’ll have to see how high the pumpers can take us into the open. With this data, we are much more likely to flip short if we have a good rally now unless Obama says something truly amazing at his 11am conference. We also have the EU stress-test at about 11am EST (4pm London) and we’re thinking it’s not going to be pretty or they would have announced it before their markets closed, don’t you think?
So we are now officially in take the bullish money and run mode with tight stops as we head into that 9:55 Consumer Confidence (or lack thereof) Survey but first, we get Industrial Production at 9:15 and we resort to the old axiom there that a scared worker is a productive worker so we should get another nice number out of that one before the potential bad news from the Consumer front.
9:15 Update: Oops, Industrial Production was up just 0.2% vs. 0.3% expected and Cap Utilization is off 0.2% as well! It looks like that Empire Manufacturing Index is picking up on a nasty national trend. We got very good earnings from GOOG and C but they don’t manufacture anything so let’s not get too excited about that so it’s back to cashy and cautious into the weekend and we’ll play the ball as it bounces next week!
Have a great weekend,
- Phil
Tags: IWM, oil futures, OIL SPECULATION, QQQ, USO