Pre Market futures are up, but from what I am seeing thus far is that the advance in the futures is on weak volume. Not seeing a bullish rally here based on what I see so far and I would not be surprised to see the rally, if this is what it turns into to be faded quickly.
We are still short on the DOW by being in the Ultrashort symbol: DXD. See our post from February 13th for details of our trade. We are sticking with this plan and are using our entry price as our stop loss should any rally attempt try to take out that resistance level. However, this does not change our longer term view and we will quickly re-enter this short position of the DOW by taking a stand at the next resistance level.
There is not much of any substance this morning to justify the advance in the pre market futures. Wal-Mart had reported earnings this morning and were basically in-line with what they said they would have last quarter, no big surprise. And more importantly nothing great with respect to forward guidance. Wal-Mart earnings shown below…
REPORTS Q4 $1.04 (EX CHARGES) V $1.02E, R $106.3B V $106.8BE; GUIDES AT THE LOW END OF ESTIMATES
- Guides Q1 EPS $0.70-0.74 v $0.74e.
- Guides FY09 EPS $3.30-3.43 v $3.43e.
- Reports Q4 SSS ex-fuel +1.6%
- EPS items (+0.02 net add) included charges of $0.03 for approximately $70M in after-tax expenses for dropped U.S. real estate projects and an after-tax restructuring charge of $32M in the Company’s Japan operations, and a $0.01 benefit from the recognition of approximately $38M in after-tax gains from the sale of certain real estate properties.
- Customers more cautious in January spending
Anyone who views these numbers as being bullish may be in for a surprise down the road. Some say that if you build a better mouse trap customers will come, perhaps retails establishments are finding a way to create a better "bull trap". We shall see.
Bond insurers are yet again the topic De Jour. The CEO of MBIA has quit his position over the weekend and replaced with a former CEO, NY Insurance Commissioner Eric Dinallo is making statements that he hopes a resolution will be implemented soon. And on the rumor mill MBIA is believed to be working on a plan to divide the company into two parts, the good stuff, and the poison. Will this satisfy the ratings agencies? Can’t say… But if I were working at Moody’s or S&P it would not impress me.
So at this moment we are anticipating a higher open out of the gate. Lisa and I will be watching volume levels on the upside and downside throughout the day for clues into the strength, or lack thereof in today’s actions.
Oil is now approaching near $100 US dollars yet again and Gold is on another bullish rally upwards. A bit if a strange combination but with oil rising again this will only add to fuel costs in the near term and we will shortly be seeing higher gas prices yet again. Oil breaking $100 a barrel will send bulls into a slight shock as they reevaluate their positions given the circumstances of increasing commodity prices. Inflation is alive and well in the United States.
