They keep me hanging on.
Set me free, why don't ya babe. Get out my life, why don't ya babe. Cause you don't really want to buy me, you just keep me hanging' on. You don't really need me but you keep me hanging' on. The oil bulls have got to be asking that question. Why oh why do you keep me hanging on by my finger tips? Another failed rally after the stocks led oil up it was the oil that led the whole mess down. Now even the most bullish analysts are starting to turn bearish as their bullish fantasies are becoming a nightmare. Of course if they are turning bearish should I be turning bullish? At some point the data is coming home to roost.
A sluggish economic recovery underpinned by a weak employment picture does not bode well for the economic recovery. Oh sure oil got a bounce on the fact that the Institute for Supply Management, (ISM) said its index tracking service-oriented was still expanding at 53.8 yet how could that carry the day when it was and below market expectations. Oil bulls started to ask themselves why is this bullish and starting to dump contracts late in the afternoon. That kind of market action with a failed rally might be the precursor to a total market meltdown. Oil bulls had enough and were ready to declare the bull move over yet now news out of China may keep them hanging on. Dow Jones reports that China, the main driver of all energy demand growth, announced a plan to spend a whopping bring $100 billion in infrastructure spending to this year. Oh sure they need it and not just the infrastructure but a new stimulus driver to keep up their rate of oil demand growth to meet the bulls market expectations. Dow Jones says that China's consumption of products such as bitumen, which is used in road building, soared after Beijing ramped up capital spending last year to cushion the impact on its economy from a sharp slowdown in exports to the U.S. and Europe. This year's $100-billion outlay will be targeted at 23 energy-intensive projects in remote western provinces such as Gansu and Sichuan, China's National Development and Reform Commission said on its website. While that news was supportive for oil there was news out of China that was bearish for gold. Dow Jones reported that a statement by China's State Administration of Foreign Exchange that it won't use gold as a major channel for the investment of China's $2.45 trillion in reserves has added to the downward pressure on gold. So while the safe haven plays like bonds and the dollar are benefiting, gold has lost a bit of luster. Oh sure we know the Chinese like to say stuff like that to break the market so they can buy more buit right now it is bearish. That means as a safe haven the dollar is a better bet and that takes away some of the bullish impact from the China news. Is it any wonder why I am advising most clients to play the trading ranges? Oh sure I am long term bearish as I have been pretty much all year but this downtrend has been choppy and uneven. Make sure you are signed up for my daily energy blast and receive a trial of my daily entry and exit points. Just call me at 800-935-6487 or email me at email@example.com to open your account. Why don't you make a new start by watching the Fox Business Network where you can see me every day!
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