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Bolling: Basket of Trades to Close Out Week

Eric Bolling

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 Quote) 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 Quote) decision to walk from the Yahoo!(YHOO Quote) 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 Quote) and Goldman Sachs(GS Quote) and energy like Chevron(CVX Quote) and Exxon Mobil(XOM Quote). I will most likely look to buy Monsanto(MON Quote), Deere(DE Quote) and possibly a steel stock like U.S. Steel(X Quote) 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 Quote) and AT&T(T Quote) below 1382 on a settlement basis.

Have a profitable trading day and a great weekend.