Eric's Third Article from thestreet.com
Basket of Trades to Close Out Week
Editor's Note: Eric Bolling is new to TheStreet.com. A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in a column for TheStreet.com.
The week's almost over, but before you start kicking back, there's plenty of hot trades out there to close out a busy week.
On Monday, there was a lot to talk about the Berkshire Hathaway(BRK.A - Cramer's Take - Stockpickr) investor meeting that was finishing up in Omaha. Warren Buffett and Bill Gates (Berkshire Hathaway board member) were available and spent some time with a FOX Business colleague of mine.
The most interesting takeaway (for me) from the interview conducted by my good friend Liz Claman was Gates' reaction to Microsoft's(MSFT - Cramer's Take - Stockpickr) decision to walk from the Yahoo!(YHOO - Cramer's Take - Stockpickr) offer. I think we realized that Steve Ballmer is in complete control of the Microsoft steering wheel. Gates seemed more interested in telling us what a great investor, philanthropist, guy Warren is. (Uh.. Bill, we knew that.)
We were then given a chance to see Susan Decker (Yahoo president- and, very interestingly, also a board member of Berkshire Hathaway) tell us, matter-of-factly, that the deal just didn't happen. "There was a bid, and there was an ask." Hmmm.... Yahoo! closed at $28.67 the prior Friday and opened in New York at $23.03, down 19.5% (Think she wished CEO Jerry Yang moved his ask price?).
Tuesday I spent the morning trying to make logic out of a $122 crude oil price. It defies logic, but years of reading Dennis Gartman's newsletter columns taught me that markets can stay illogical longer than stubborn traders can remain solvent... or something like that. Dennis is so eloquent he would say it in precisely the correct way. I am still watching crude defy gravity as I write and it just traded at $124.61, another new high.
This comes on the heels of a massive (and unexpected) inventory build this week. Gasoline demand dipped for the first time since most of us have been trading, and first-quarter productivity, although pleasantly positive, has paved the way for the Fed to stop easing soon (As in June).
So if I can't tag gasoline demand, crude oil supply, or the potential for a weaker dollar due to Fed rate cuts.....Dennis?
Wednesday was a challenging trading day. As mentioned above, the productivity figures for the first quarter were expected to show that non-farm business productivity rose 1.3% to 1.5%. We were given a bit of good news in that the number was much better than analysts (ha!) expectations. Productivity increase for the quarter was 2.2%.
The markets reacted as expected. The S&P went from a pre-open flat to a gain. But that's where the fun ended. The Dow, S&P and Nasdaq all steadily declined throughout the session. The markets closed at the lows of the session and my on-air optimism was replaced with my tail wedged firmly between my legs.
I follow the charts religiously and 1400 in the June S& P is very important. It has been building as a value area. I would like to see a close above 1410 soon. And a close above 1427 would green-light some serious buying -- both mine and The Street.
As it stands, the S&P is in a precarious spot. There is a trend line that extends from the March 17 low and the April 15 low and onward. That line is support now. It comes in at 1382 this week. I definitely want to see 1382 hold Friday. Or we may retrace back down to the first level of support at 1350.
On Thursday, I was encouraged to see the Dow manage a plus (+52.5) after the near 200-point sell-off Wednesday. However, the S& P chart points are very relevant in determining my add, sell, or hold mindset going forward. I have to admit, the shocking oil price is weighing on my decisions as well.
However, today I am ready to add to some financials like Citigroup(C - Cramer's Take - Stockpickr) and Goldman Sachs(GS - Cramer's Take - Stockpickr) and energy like Chevron(CVX - Cramer's Take - Stockpickr) and Exxon Mobil(XOM - Cramer's Take - Stockpickr). I will most likely look to buy Monsanto(MON - Cramer's Take - Stockpickr), Deere(DE - Cramer's Take - Stockpickr) and possibly a steel stock like U.S. Steel(X - Cramer's Take - Stockpickr) if the resistance (1427) is taken out.
I will hold everything between 1427 and 1382, and I will sell some of my non-core holdings in Cisco(CSCO - Cramer's Take - Stockpickr) and AT&T(T - Cramer's Take - Stockpickr) below 1382 on a settlement basis.
Have a profitable trading day and a great weekend.
At time of publication, Bolling was short oil, long C, GS, MSFT, CVX and XOM, although holdings can change at any time.
Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."
Bolling is an active trader specializing in commodities, resource trades and ETFs.
Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.
After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.
Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.
