Monday, October 09, 2006


Sector Spotlight: Metals

North Korea detonates a nuclear bomb and the market says: "Fuck you, welcome to the 1940's."

Not only is spinach a deadly treat, now they are reporting findings of ecoli in ground beef and lettuce too. What the fuck.

Despite the various ways armageddon is trying to position itself, the market, led by dip-buyers, wants to go higher.

However, before you go out and buy the highest multiple stock on your monitor, remember earnings season has officially begun and many companies (as always) will disappoint. For now, I will remain bullish, until I see some really bad MU type earnings repeat itself.

As for the Metals:

I am not sure whether this is a dead cat bounce or a real break out, but the index is up 4.4% today. If you are an inflation hawk, the last thing you want to see are commodity based stocks rally. In my opinion, both metal stocks and tech should not rally at the same time. If so, I am afraid the Fed may have to jack rates higher.

Higher commodity prices= higher inflation= lower stock market.

Needless to say, keep a close eye on the commodity based stocks.

NOTE: Please take the new "Fly Survey." Are you bullish or bearish on the markets?

The following Metal stocks have mojo:

X +6.9%
NUE +5.3%
HSR +5.2%
ERS +5.2%
ATI +4.5%
TIE +4.2%

Looks to me like the market is welcoming the Nuke Tests. Hell never know if they keep doing them we might start going green. None of this makes since to me either as the overseas markets sold off we are flat or rallying some. Oh well I guess it is all because the bond markets are closed. I think the bond market is leading this entire rally and if they turn down so does the equity market. But who knows maybe we are living things in reverse now.
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