Stocks
Today was a dud following yesterday's big advance. Big one day upmoves without positive
follow - through the next few days are off-putting. Sometimes a big one day move during
a downturn reflects fast short covering by traders caught flatfooted by a positive news item
and sometimes it reflects positive interest but with a lack of conviction. It is like a band
wagon that only goes for a couple yards before encountering challenges. At any rate, if you
are freshly long, watch carefully for some decent follow-through in the days ahead.
Oil Price
My plan has been to go long oil near year's end or in early 2013. The oil market is in its
weakest seasonal period of the year and I was hoping that with global economic activity
still very sluggish, I could take a long position and pick up oil with WTIC down in the
75 - 80 area over the next month or two with an eye toward holding it through 9/13, as I
think US attention will re-focus on Iran and its nuclear program now that the election is over.
I am assuming Iran is providing financial encouragement to Hamas now to message the West
that It can make trouble and create some war fatigue in Israel. But, I think the US will
return to the Iran nuke issue next year anyway.
The oil price is having a counter - seasonal rally here as traders play with Israel vs Hamas
and the newly positive vibe on settling the fiscal cliff issue here in the US. I do not want to
be piggy and wait for $80 bl. or lower, but I'll probably sit on my hands for a spot longer.
WTIC Chart
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