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Two Ways To Play: Heat Is On For Gas


Strengthen your portfolio in good times and bad.

More Cost Increases Headed Your Way

According to the Wall Street Journal utilities and industry analysts estimate that heating costs will jump 30% to 50% for the upcoming winter for families that heat their homes with natural gas.

Those that use heating oil could see cost increases of up to 50% to 100%. Some worry that this could be the tipping point as consumers already struggle with record food and gasoline prices across the nation.

From the Bull Pen: Bulls can consider an upside play in the natural gas ETF (UNG) and can fade (read: buy) the weakness into $45 support.

From the Bear Cave: Coach (COH) may be an option for retail bears as the consumer continues to get pounded with higher energy costs. One option is to fade (read: sell) the stock as it approaches the $30-33 range.

Citi Not As Ugly As Expected

Results from Citigroup's (C) second quarter are helping to lift stock futures this morning. The largest U.S. bank by assets reported a loss of 49 cents a share, which was 17 cents better than analysts' expectations for a loss of 66 cents per share. Revenues fell 29.2% year-over-year to $18.65 billion vs. $17.55 billion consensus. The company disclosed writedowns of $7.2 billion in Securities and Banking, and higher credit costs which increased by $4.5 billion. Total assets declined by $99 bln since the first quarter of 2008. For context, see Professor Kevin Depew's Five Things You Need To Know.

From the Bull Pen: Do the financials have more room to run? Those bullish can play the upside in the financial ETF (XLF); sell-stops can be set below $19.50.

From the Bear Cave: Are the results for Citi even good? The bears welcome this rally and may fade (read: sell) at the first resistance near the $20 level.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading closed with the Hang Seng +0.64%, Nikkei -0.65%, Sensex +3.99%, Taiwan -2.28% and Shanghai +3.49%.

Looking at Europe we see the CAC +0.59%, DAX +1.36%, FTSE +0.95%.

As of 8:20 AM EST, S&P futures are up +7 points to 1260, and Nasdaq futures are higher +4 points to 1843.

A Look At Commodities

Crude oil is higher +1.53 to 130.91. Gold is down -12.40 to 958.20. Silver is off -0.057 to 18.610, and copper is lower -4.50 to 369.00

The dollar index is lower -0.032 to 72.210.

No events on the radar today. Good luck and have a great weekend!
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No positions in stocks mentioned.

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