Thursday, March 01, 2007

A warning shot.

CNBC: Jim Rogers on Commodity Moves.

Summary: Jim Rogers believes the sell off on Tuesday was a warning shot, and that there is further to fall as we are overdue for a stronger correction; he points out that there are gigantic amounts of liquidity in the system and believes something is going to happen to change that, and then lots of things are going to unravel. In terms of problem signs, he highlights housing starts, autos, the yield curve, sub-prime debt, and margin debt at an all time high. He suggests raising cash, selling short, or buying currencies other than the dollar, and he is bullish on agricultural commodities, utilities, and - strangely enough - airlines. [Not mentioned here, but Air China is a pick of his, but let it stabilize first.]

CNBC: Making Fast Money.

Summary: Jeff Macke says hold off on buying, and wants to buy higher risk, later; suggests waiting for the other shoe to drop, as he believes this is the first part of a multi-tier sell off, and is looking to buy towards the end of March. Tim Strazzini likes the semiconductors after we turn. Eric Bolling likes gold, oil, refiners, and foreign currencies (highlights FXE ETF). Guy Adami also says hold off, looking to buy Apple, South Korea and Taiwan ETFs when we bottom.

CNBC: U.S. Hits Record For Energy Demand.

Summary: Lest we forget our primary focus, US oil demand in the past 4 weeks was huge. Traders are keeping an eye on the macro picture (the economy) though, because oil demand should be affected if the economy deterioriates.

My own thoughts:

I think there is more work to be done on the downside. I also like agricultural commodities and Apple. My sector screen highlights SMH (semiconductors) as Tim Strazzini mentions. I am personally skeptical on this, but usually I hold my nose and trade this screen. Usually.