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Minyanville's Before The Bell: UBS Warns and the Crude 'Tude


UBS warns of further write-downs and oil surges past $93 a barrel. Futures point higher!

Morning Perspective: UBS Warning

The WSJ reports UBS (UBS) said its third quarter loss will be in-line with estimates given earlier this month as the bank prepares to report results tomorrow. Losses will be between $515.5- 687.3 mln. Although UBS warned investors of further write-downs due to mortgage-related securities, the company stated the current quarter has started positively. Read Minyan Peter's The Ripple Effect Of Collateralized Debt Downgrades.

The Bull Pen: Those believing the worst is over for UBS may set sell-stops below $49.79, the low of this summer's credit crunch.

The Bear Cave: Todd recently noted the disconnect between perception and reality in financials. Traders considering shorting Merrill Lynch (MER) should note the heavy resistance in the $70-$72 as areas for buy-stops.

The Crude 'Tude

Bloomberg reports crude oil climbed above $93 a barrel for the first time amid rising tensions in the Middle East and halts in Mexican oil production. Mexico, the third-largest supplier to the U.S., halted production of about 600,000 barrels a day as a storm passed through the Gulf of Mexico. Also contributing to the increase in prices, the dollar dropped to $1.4426 per euro, the weakest level since that currency was introduced in 1999. Read Professor Sally Limantour's An Update on Energy, Food, and Inflation.

The Bull Pen: Professor Krueger mentioned the benefits of higher prices with shipping stocks. Energy bulls may look to Dryships (DRYS) with recent support near $115. Trades below may act as a sell-stop.

The Bear Cave: Todd has noted the recent inability of the drillers (OSX) to rally with the price of crude. Traders may look to short Tidewater (TDW) with buy-stops above $63 or Smith International (SII), which we highlighted Friday, with a buy-stop above $68

A Quick Check Around the World

Asian markets ended positive with the Hang Seng +3.89%, Nikkei +1.17%, Sensex +3.82, Taiwan +1.85%, and Shanghai up +2.83%.

A quick check on Europe finds the CAC +0.61%, DAX +0.64%, and FTSE +1.85%. As of 8:30 AM EST, S&P futures are trading up +5.0 points, and Nasdaq future are up +13.75 points.

A Look At Commodities

Crude is currently at 92.77, up +0.91. Metals are stronger. Gold is up +9.9 to 797.40, Silver is up +0.23 to 14.510, and copper is up +0.04 to 3.57. The dollar index is down -0.17 to 76.85.

On the Radar

There are no economic events scheduled today.

Click here for Minyanville's full Trading Radar.

Happy Monday, Minyans! Good luck!
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