Retail Sales Soften the Market Early

Pre-market futures dropped on the news that Retail Sales missed estimates. The miss was larger than expected as the number came in at -0.3% versus +0.3% expected. PPI was also lower than expected, which shows an economy that is not inflationary, but continues to be subdued. Stock market futures were close to the flat-line prior to the reports on the news that the U.S. Treasury and the Fed are working on the sale of LEH through a consortium of firms. There are different opinions on who LEH might be sold to, but most traders are now at least expecting the sale of LEH and the winding up of that whole mess.....

There is the typical pre-market news and jostling and pushing back and forth in other areas, but the main focus will be on the "negative growth" concerns from Retail Sales and PPI. It will be important for the market to hold the line this morning and build off the bounce back from yesterday in order for the move up to continue today.

Hurricane Ike is making just the kind of headlines that keeps the media excited. Some "official" decided to use the term "certain death" for the residents of Galveston Island and that's all I've seen on the headlines since last night. In addition, the media is reporting that much of the Gulf oil production will have to be shut down, and that Houston residents were making an incredibly "bold" decision to stay and "face down" the storm. I'm not sure how Ike will really affect the Gulf Coast, and I am hoping for the best possible outcome for the people in the path of the storm. In the meanwhile, oil is up only about .50 cents in the $101 area.

7:45 am MT: I nibbled on small call positions for JPM, CL, WHR, and LMT. I like how tough some of the Retail stocks are holding up as well, we'll see if that lasts throughout the day. It looks like the market will be fighting for much of the morning, so I don't want to get too much in the way of calls until the battle tips one way or the other. If the Bulls lose the day I don't want to be sitting on a lot of calls. So I'm light and tight for now, but I'm positioned with a few small calls. It's possible that this all caves in, so I would like to see the Dow hold the 11,200 area, the SPX hold the 1,225 area, and the Naz hold the 2,210 area. If we drop much below those levels then we could face a sell-off today. We shall see how the day goes.....