Which Way Wednesday – Beige Book Edition


USD Chart Hourly5 Fed speakers today! 

We also have a 20-Year Bond Auction at 1pm and Waller (noon) and Williams (12:30) speak ahead of the auction – both hawks who will attempt to keep the auction from failing and, at 1pm, Bowman speaks – another hawk. After the Beige Book (2pm) we have Harker at 3:15 (dove) and Cook, the dove of the day, buried at 6:55 this evening.

That lineup already has the Dollar bouncing off the 106 line and we’ll see if we make another run to 107, which would probably erase the whole week’s index progress – which really only came Monday morning anyway. 

It’s all good as long as we hold 4,320 but we’ve been saying that for two years now and we’ve never made it to the next zone for very long so this is either one Hell of a consolidation or we are so overvalued up here the buy programs simply shut themselves down at these levels and progress is impossible.

Either way, it’s a great time to grab those hedges while they are cheap (see Friday’s Report).  On Monday we asked ShelBot how the week would go and he predicted we’d close Tuesday at 4,360 and we actually closed at 4,373 and that’s close enough. For today, ShelBot says back to 4,340 but 4,370 is where he thinks the week will close – we’ll see how he does but this is very impressive for a volatile earnings week so far.

Trouble in Gaza has sent Oil (/CL) back to $88.50 this morning and that’s $93 on Brent so that’s a short – the same one we regretted missing on Monday, when Oil quickly fell back to $87, for a $1,000 per contract gain.   

Gaza doesn’t have any oil so, unless the war expands to include Iran and other countries who actually have oil – there’s no reason for this burst back over $85. After showing a build of 12.94M barrels last week, API showed a 4.4M barrel draw this week but last week’s (11th) EIA Report showed a 10.2Mb build and you can see the damage that did so it’s very possible Oil bulls will once again be disappointed at 10:30, when the new EIA Report is released.  

Natural Gas Chart DailySpeaking of Energy, the Balticonnector Natural Gas Pipeline, which connects Finland and Estonia, was sabotaged last week, causing a major disruption in the gas supply and communication in the Baltic region. The pipeline and its associated telecoms cable were damaged by explosives and are expected to be offline until April. The attack is suspected to be linked to Russia, which has been opposing Finland’s decision to join NATO and has been trying to undermine the diversification and integration of the European gas market.

The pipeline outage could have significant implications for the natural gas (/NG) prices in Europe and should increase demand for US LNG exports. The Natural Gas ETF, UNG has been a dead fish all year and it could be fun to add a bullish trade to the Short-Term Portfolio (STP), the March $5 calls are only $2.55 and that’s just 0.37 of premium while ShelBot tells us /NG prices could rise as much as 44% so even 22% would take UNG to $8.61 and that would be a $1.11 (43.5%) gain so that’s our goal but I’d take a quick buck off the table if we make it on at least half.  Let’s buy 20 UNG March $5 calls for the STP for $5,100 

Hurricane season has been a big bust for /NG traders but the Stark’s say “Winter is Coming” – though maybe not with Global Warming…  

8:30 Update – Oil back to $87 already! When you make $1,000 per contract that quickly it is certainly smart to take at least half off the table and put stops on the rest at $500. That way you lock in $750 in profit overall. Then, for each additional $500 you make, raise the stop by $250.

In earnings news today, we got misses from State Street (STT), Travelers (TRV), Northern Trust (NTRS) and Citizens Financial (CFG) and it’s way too early to see this many bank misses so BE CAREFUL!!! USB hit their numbers but guided down and UAL guided lower last night – trouble in Paradise with 90% of the S&P 500 still waiting to report.  

Here’s a rundown of some other news from ShelBot 🤓:  

Consider this
Consider this the hint of the century
Consider this the slip
That brought me to my knees, failed
What if all these fantasies come
Flailing around
Now I’ve said too much” – REM 



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