Wednesday, June 25, 2008

Wednesday Intraday Psychology

Durable Goods orders for the month of May will be released at 8:30 ET.
We feel the manufacturing sector will continue to show strength, and the forecast of 0% will be bested. Our readers should position themselves for a bear market rally. Please monitor the price of crude from open to close, but especially after the Crude Oil Inventory release comes at 10:30 ET for week ending 6/21. POTC is confident crude oil will begin to ease, and any drop in exess of $3.00/barrel should further ignite the bears. A United Arab Emirates oil minister had more bearish words for crude late Tuesday night at an Oil and Gas conference in Seoul, Korea. Here's the story courtesy of the Dow Jones news wires:

DJ UAE Oil Min: Willing To Supply More Oil If Market Needs

SEOUL (Dow Jones)--The global oil market is still well supplied, but the United Arab Emirates is willing to provide more oil if needs arise, the country's minister of energy said Wednesday.

"We are willing to supply more because we have spare capacity. We are willing to supply if the market needs oil," Mohamed Al Hamli said on the sidelines of the Asian Oil & Gas Show being held in Seoul, South Korea, June 25-27.

"The market is adequately supplied at the moment," Al Hamli added.

The comments follow a one-day summit between oil producers and consumers held June 22 in the Red Sea port city of Jeddah. During the summit, Saudi Arabia confirmed it would boost output from July by 200,000 barrels a day to 9.7 million barrels a day, on top of the output boost of 300,000 barrels a day it announced in May. It also pledged to increase investment in its oil industry.

But Saudi's commitment has failed to ease supply concerns, with traders focusing on shut-in production in Nigeria.

At 0257 GMT, light, sweet crude oil for August delivery on the New York Mercantile Exchange was trading at $136.84 a barrel, down 16 cents and below the record high of $139.89 a barrel set June 16.

-By Sherry Su and Shin Jung-Won; Dow Jones Newswires; 65-64154065;

(END) Dow Jones Newswires
June 24, 2008 22:59 ET (02:59 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.- - 10 59 PM EDT 06-24-08

At 2:15pm ET, the FOMC will release their policy statement. The bullish market reaction will continue to build on the better than expected Durable Goods orders before market open. The KEY to a very bullish reaction surrounds the two dissenters at the last policy meeting. POTC believes the last interest rate move was unnecessary and the two dissenters now have more power. No talking head on CNBC addressed that point. We see very hawkish rhetoric out of the FOMC, mainly due to the two dissenters who now have more credibility and more influence. Our readers must understand this is a mere bear market rally on Wednesday, so please tread cautiously, as the bias is still down. The 1,256 S&P previous St Patrick's low could be tested IF crude breaks through $140/barrel, but POTC doesn't see that happening this week. The perma-bears will be full of excuses, but our readers should not let their words fall on deaf ears.

Research in Motion (RIMM) reports after the close. We don't recommend buying shares before the report, as inflation has spread outside the U.S. RIMM's quarter will probably beat estimates, but their conference call (CC) tone and guidance should send shares lower Thursday morning. POTC feels the competition in the cell phone space is getting deeper than anyone envisioned just 6 months ago, especially with Apple, Nokia, Samsung, and even Google's android supposed 4th quarter launch. Isn't Garmin (GRMN) trying to get their GPS concentrated phone to the market by Christmas as well? Rumors are GRMN's phone will be delayed. The competitive factors from Apple, Nokia, Samsung, and now Google are not "game over" for RIMM, as they still have the most sought after high profile phone, and what we feel is the best marketing team in the land of technology today.
The Psychology of the Call team predicts a bull stampede all day Wednesday, so enjoy it.

1 comment:

Anonymous said...

So far your analysis with rally and esp oil down $3.00 is very good, congrats.