Week of Jan 28th, S&P 500 & Crude Oil

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Sorry for the no updates for my blog for last two weeks...cos of my family move to down under, perth, australia as my new home...


Stock Index Corner: S&P 500

The Weekly eMini S&P 500 has shown strong signs of loosing momentum at the peak/ channel resistance and the potential of a correction is imminent. The support for the corrective move may be at 1372 for the completion.

S&P500:
Big Picture: (monthly): Inside Month...still Bullish (but need to watch for the change in weekly trend)
Medium term (weekly): Sideway to Bearish
Short term (daily): Sideway to Bearish

Fundamental:

Earnings season picked up steam last week after starting out sluggishly. But gloomy guidance remains a problem. With 197, or 39%, of the S&P 500 companiesreporting fourth-quarter results,68%have beaten views vs. 17% that have fallen short, according toThomsonFinancial.
That’s in line with recent trends, and it’s a big improvement from early in the week, when the ratio was60%positive to20%negative. “We started out slowly in terms of negative-to-positive surprises, but we’ve seen a turnaround,” saidDirkVanDijk, research director at Zacks Investment Research. S&P500firmsareontracktopost 9.9% profit growth vs. a year earlier,
Thomson said. That includes actual resultsand estimates. Assuming the 61% of companies still due to report beat views by a typical amount, then the S&P 500 should post its 14th straight quarter of double-digit profit growth. Nowthebad news. “Guidance actually has been fairly
negative to date,” saidJohn Butters, a research analyst at Thomson Financial. So far among all U.S. firms, 106 have warned for the first quarter vs. 34 that raised targets. That’s a 3.1 negative-to-positive ratio, well above the typical 2.0. Among S&P 500firms, that ratio is 6.4.

Major World Indexes
Medium term trend: FTSE (Down), Nikkei (UP,), ASX (UP)

Commodity Corner: Crude Oil
Technical:
The technical picture has shown less bearishness relative to few weeks ago. Potential medium term bottom may be in place. Has hit one of the major fibonnaci support at about 50.50 for March corntract.

Fundamental:


March crude oil prices in the past week have rebounded mildly higher from the 1-1/2 year low of $49.90 posted on Jan 28 (G07 contract). Recent bullish factors include (1) President Bush’s plan to start buying 100,000 bpd of crude oil in spring to double the size of the Strategic Petroleum Reserve to 1.5 bln barrels over the next 20 years, (2) the colder weather in the US (which is boosting heating oil demand), (3) technical short-covering, and (4) new kidnappings
by rebels in Nigeria. The latest weekly DOE report showed increased heating oil demand with a 1-month high of 20.4 mln bpd in deliveries from refineries and terminals to customers in the latest week. Other than the demand figures, the DOE report was bearish with a 789,000 rise in crude oil inventories, a +4.0 mln bbl rise in gasoline inventories, and a +750,000 bbl rise in distillate inventories. US inventories remain comfortably above their respective 5-year seasonal averages: crude oil +9.3%, gasoline +3.3%, distillates +7.7%. The market continues to watch whether Saudi Arabia or any other OPEC members are cutting production to implement
promised production cuts.

note: the above fudnamentals are exerpts of IBD and CRB reports.

Trading ideas : (please do your own research and apply your profit/ risk management rules in all trades, please note except options writing, all the other trades may last just several days)

Writing Options: Emini S&P 500 OTM Calls

Futures: Long Crude Oil
Stocks: VCLK, HMIN