Radar for January 17, 2007

Addressing a Typo

Macro Outlook
A few more items on the Fed’s rate break/no rate break scale: On the one hand, the Reserve itself just reported that industrial production rose by 0.4% last month after two consecutive 0.1% drops. This would argue that rates are fine where they are.

On the other hand, the Labor Department notes that its Producer Price Index rose by 0.9% in December, down sharply from November’s 2% spike. This would argue that a downward nudge on rates would not impact inflation adversely.

I will continue to cover this as key items roll in all week.

Meanwhile, let’s address a typo in this week’s WOW: The Pfizer (PFE:NYSE) put recommended last week is still a put week, folks. The code is correct. Your erstwhile editor just went cross-eyed at the last minute.

More tonight in Macro Outlook…

Material Profits
I asked and you’ve delivered…

My “Global Survey” call for ideas yielded a number of suggestions, with many of them including uranium and Australia or Canada.

We also had suggestions about oil and Russia, timber and Canada, and base metals in Mexico and Argentina.

Thanks for all your ideas, and keep ’em coming!

Trading Tactics
With a thin layer of snow on the ground and temperatures hovering in the 20’s, it’s clear that the mild winter here in the Midwest is officially over. But despite the rapidly falling temperatures, oil prices continue to fall, as crude oil prices are closing in on 2-year lows.

As I write, in fact, oil is still under $51 a barrel.

Could it be that the hedge funds have caused prices to drop too far, too fast?

Is it really justifiable that oil prices are nearing levels we haven’t’ seen since May of 2005?

I, for one, think a longer-dated oil upside play is a good bargain here – as you can use the near-term weakness to establisher a long-term play on the cheap. WS Traders, this may be something we initiate this week, so stay tuned.