Intraday Commentary ~ 7/29/08

3:59pm
Markets rallying into the close and will finish at session highs. XLF up 7.5%. Stay tuned for today’s video.

3:28pm
Next resistance level on the ES is 1262.75

3:23pm
The rally continues to be led by financials, with the XLF now up more than 6%. WM, SOV, WB, FNM, and BAC are all up more than 10%.

3:21pm
The ES just made a fresh session high above 1257. Be careful on weakness in case of a double top pullback.

3:02pm
The ES is holding the 20 moving average. Volume on the light side since this morning.

2:40pm
The ES is testing the 20 moving average at 1252.85. Crude oil rose and nat gas sold off into the close of pit trading for the second consecutive day.

2:14pm
Oil spiking up almost $2 in the last 20 minutes, still down $1.75 to 123.

2:00pm
The market at fresh session highs. There may be some resistance around this 1257 level. We are playing the “breakout” in TSO from the long side.

1:13pm
The ES is still consolidating sideways. The 20 moving average is creeping higher, now at 1250, and should serve as some support.

1:07pm
Seeing the UNG rally nicely, now above 43.

12:24pm
The ES is consolidating again after the latest push higher. The intraday rally looks healthy and sustainable.

11:44am
S&P moving out to fresh session highs, being led by financials, XLF up 3.2%.

11:26am
The ES is consolidating sideways. It looks to be preparing for a another move higher.

11:10am
Nat gas making a move higher, volume OK.

10:38am
Crude making news lows. Gold drifting towards session lows. The S&P sitting near session highs, volume waning.

10:15am
The SPY is currently trading above the descending trendline. Let’s see if we can get a small pullback here to add another 5% to our position. Oil continues to struggle, now down almost $3.50, near $121.

10:06am
SPY at bumping against a descending trendline. This is the level that we need to break above in order to add to our SSO (L) position. c

10:03am
The USO has broken under the 99 support level. Let’s see where the 10-minute candle closes.

10:01am
The ES trading above its 200 moving average on better than expected Conference Board consumer confidence data. (click on image to enlarge)

Data Source: Haver Analytics | Consensus Data Source: Market News International and Thomson Financial

9:47am
The dollar is rallying, pressuring commodities lower. Nat Gas is threatening to break down under 42.16. Oil approaching 122.50 support level.

9:27am
As we head into the open, the ES is trading just above its 20 moving average, and the 50 moving average is just under that. A push higher at the open is very possible here. The 200 moving average is resistance above at 1243.

9:17am
Financials mixed in the pre-market action. Citigroup (C) is lower by 4.6%.
Up pre-market: FNM, FRE, LEH, WB, GS, BAC, JPM
Down pre-market: C, MER, AIG, WM

9:06am
Regarding the MER asset sale, I think its good news for MER, finally fessing up to their losses and taking the big hit. It is frustrating that management has been lying to us in all their communications, but at least they are getting serious now. I think this is not good news for other financials because there is now a market price for these assets that have not been marked down yet. This should result in additional write-downs across the board. If Merill’s actions speed up the write-downs of other firms and boosts the transparency of true asset values, we will get closer to a bottom as uncertainty decreases.

9:05am
The S&P E-Mini Futures (ES) are trading higher by $4.50 to 1239.50 with oil trading lower by more than $1.

9:01am
I found this chart interesting. Corporate bond spreads are getting worse, not better. Short-term spreads are wider now than during the Bear Stearn’s implosion. Check out this article by Bloomberg. (click on image to enlarge)

8:48am
Good morning. Everybody is talking about actions taken yesterday by Merill Lynch and what it means for the financial sector. MER announced a $5.7B write-down, primarily through the sale of CDOs. They also announced that they will issue 365.5M of shares (36.3% of shares outstanding). Analysts were disapoointed by the issuance of common stock. Oppenheimer’s Whitney reduced earnings estimates for FY08 but said the “hardest work is behind Merill” and is “closer to fairly valued levels”. My question is, how did Wall Street find out about this news yesterday? The stock was down 12% yesterday and is flat this morning. It’s as if the news came out to certain traders a day early. (click on image to enlarge)