- An EM credit crunch, not a sudden stop - Alphaville
- TIC Tock for China's USTs? - Alphaville
- After FRX deal, Actavis could climb 50% - Barron's
I have yet to do a significant amount of reading tonight, but that should get you started.
US markets were a mixed bag today - S&P closed up 2.13 handles to 1840, Dow lost 24 points to 16,130 and the Nasdaq finished 29 points higher to 4,272.
Of note today was the action seen in commodities. The PowerShares DB Commodity ETF (ticker: DBC) closed 1.44% higher today. Coffee and wheat (to name a couple, see here and here) were notable performers, the former driven by dryer weather in Brazil and the latter by increased international demand.
Commodities had a rough go of it in 2013, and one day's move certainly does not indicate that the wind is changing. One could wager that incremental demand increases are out of the question as emerging economies wrestle with current-account deficits. Further digging looks to be warranted.
I would like to touch on the Market Vectors Oil Services ETF (ticker: OIH) for a moment. It looks like we could see a nice trade here - and before you say anything, I have no positions as of this writing. I will attempt to keep "talking my book" to a minimum here at The Gambler's Fallacy.
Let's consult the charts!
You can see that OIH had been trading lower from highs notched in November of last year. But last Thursday you see a breakout above that upper trend-line, and Friday and today's tape gives you an indication that the selling might be done. Crude and Brent futures did see strong moves to the upside today after an updated weather forecast showing signs of continued frigid temperatures in much of the country.
I would expect to see some offers at ~$48, but after that, $49 does not look too aggressive a target. Consider, also the ETF's 200day moving average at $46.42, just a $1.15 below today's close. That's a 1:1.24 risk-to-reward if you fancy $49 a reasonable target.
Heads or tails?
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