What is good for Exxon Mobil is good for America.
The mood shift across the stocks and commodity markets was enough to wake a sleeping ground hog. Wake up you silly ground hog, the market seems to sense a change!
Gone is that sour and gloomy mood that was oh so January. February seems to have given the market some new life. What seemed to give us that sonic hedge hog boost? Well I guess you can say Exxon Mobil. Once again it seems that what is good for Exxon Mobil is good for America. When Exxon Mobil does well it seems America does well. It was Exxon Mobil's better than expected earnings that seemed to set the stage for what turned out to be a pretty awesome day. Oh yes there were rising geopolitical issues with Nigerian rebels blowing up pipelines and increasing tensions with Iran, but really at the end of the day it was that Exxon Mobil Magic that seemed to get the risk takers back in the market and off of the fence.
Those Exxon Mobil earnings set the stage for that awesome ISM Manufacturing number, a number that normally is a forecast for future strong energy demand. The ISM blew away expectations surging to a monster 58.4%, the highest level since August of 2004 raising hopes that energy demand will stay strong as factories step up production to meet that rising demand. It also sparked some inflation fears as well as the prices paid index hit 70% up from 61.5%. Those renewed inflationary fears, along with the perception that this number could improve the jobs outlook (the employment index component surged to 53.3% from 50.2%) gave the perception that perhaps that strong GDP number was not all smoke and mirrors and actually is showing that there is at least something happening in the real economy. You know, the economy on so called Main Street. Plenty of good houses are still available. But let this be a warning: some may have to have a ground hog removed.
Of course these economic good feelings seem to have saved the oil market from a total breakdown. Oil held key support above 72 a barrel and if you use you imagination and allow for a bit of slippage, we seemed to have put in a minor double bottom around 7245 give or take a tick. Maybe even a triple which could be telling us a test again in the future. With oil back over $75 if we continue to see the stock market rally, oil could make a run back towards $77. Long term players we are still looking for a move back into the forties. Use this rally to try to put on bearish option strategies. Day traders and short term traders we are in a long term wavy down trend and should give us the opportunity for some pretty wide swings. Call me for the latest numbers at 800-935-6487 or email me at firstname.lastname@example.org to open your account. And don't forget to see me every day on the Fox Business network!