Talk about moody, I am starting to believe the oil market is manic. Can a broker prescribe meds for a market? This market is messed up and is having deep seated feelings of anxiety. The oil market is starting to hear voices and it does not know which one to listen to. Should it listen to the American Petroleum Institute that is telling it that crude supplies soared by over 6.0 million barrels last week. Or should it listen to the Department of Energy that is saying that crude oil inventories increased only by 1.7 million barrels. Or should it take note when the API reported gasoline supply rose over 2.0 million barrels or the DOE that said it only increased by 600,000 barrels. No matter. This market is a mess.
The bottom line is as follows: The Department of Energy report was bullish because it wasn't as bearish as the API. No wonder this market is a mess.
Of course supplies are secondary to the energy market. It's fixated on issues other than supply. There's always the stock market to be worried about. And who can forget the US dollar. Before the DOE report oil firmed on reports of falling wholesale inventories and talks that Pulte homes is buying Centrex builders. A housing deal, no matter why it is happening, gave some people hope that maybe, just maybe, this deal will signal a bottom in the housing market. Yet in light holiday type volume it does not take that much to be optimistic or pessimistic for that matter. When the Fed minutes came out with words like job losses, declining equity and housing wealth, the optimism seemed to turn and oil turned down with it. Yet that was yesterday - and yesterday's gone. Today is a new day and hope springs eternal. Oil rejection of the breakdown of the lower trend channel and today's reversal could turn out to be wildly bullish if we can hold onto the early gains. Forget that oil supply is 15.2% above a year ago. Forget the fact demand is lousy. The DOE says that demand is lousy. Forget that the DOE said that total products supplied over the last four-week period was only 18.9 million barrels per day, down by 4.4 percent compared to the similar period last year. Or that motor gasoline demand was down by 0.2 percent from the same period last year. Don't even worry that distillate fuel demand was down by 7.2% from last year. Just worry about the stock market and your charts.
Yet with light holiday volume, moods can shift quite quickly. Day traders love the action. The rejection of the breakdown of the lower channel and rebound keeps the bulls in control of this market. Position traders need to buy breaks.
Buy May crude at 4480 - stop 4330.
Buy May heating oil at 13000 - stop 12400.
Buy May RBOB at 12000 - stop 11700.
Buy May natural gas at 320 - stop 290.
The Dan Flynn Corn & Ethanol Report
The stock market is soaring over the Wells Fargo news.
The Asian Markets were sharply higher on the news.
This helped the May Corn settle above 400. The trading range was 401 to 396 settling at 400 1/2. We continue to monitor weather and world events in this complex.
On the Energy Front we it's pretty much the same. The market is strong due to the strength of the stock market.The Energies are also following the Dollar.