January has been a thrill ride that's for sure. Another thing that's true: I'm glad we primarily focus on "weekly" chart analysis because if you were trading day-to-day you'd have to pretty active and nimble. First, we're told "sell energy, buy tech." Then that chorus was muted, only to "buy tech and energy" today.
The idea that the administration would be doubling the strategic petroleum reserve has put a floor for now on oil prices. That surely made rascals like Chavez happy, and I wonder why we needed to make that announcement just as prices were falling. Just do it and shut-up would seem to make more sense and be shrewder.
And then moving to the much discussed energy and commodity sector we get the perhaps unintended consequences of the Bush speech regarding SPR.
Overseas all remains well removed from the concerns of Wall Street and Main Street.
Two articles caught my interest today: the first is this article from MarketWatch regarding how Davos forum participants were thinking other markets could decouple from U.S. markets. This is a notion that would have been scoffed at just a year or two ago. But given the action of Emerging Markets and other well established markets in Europe and elsewhere the idea suggests that [ahem] "it could be different this time."
The other is a Bloomberg article which I can't locate at the moment that pointed-out as oil prices were falling OPEC countries were selling U.S. Bonds. The article noted that during the previous quarter over $10 billion in U.S. bonds were sold. The recycling of petrodollars back into U.S. Treasury securities has been a hallmark for this market. Perhaps Bush's announcement on the SPR helps bonds as an unintended consequence.
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