Who Got The Free Lunch ?
Is it coincidence that the oil market made a base the day of the first current stock market low on 1/22/08 and has rallied 49 percent? The Fed has provided a lot of liquidity during this time and no doubt a good portion of it started by going to financial institutions for the purpose of handling real estate related issues, but somehow the money ended up in Saudia Arabia and the rest of the Arab countries.Â Maybe the administration knows where the Arabs hide their money and plans to grab it when they blow these countries off the map. Seriously, the point is oil inflation while inflamed by Iran rhetoric is really just part of the liquidiy game.
During this same time frame, other markets have gone up also. From the absolute interday low of 1/22/08, corn is up 34 percent, and the stock market isÂ up 12 percent (much of it in the oil and food stocks).Â Gold is a foreteller, if that is a word, of something, at its highs since 1/22/08 it was up 21 percent, today it is up 2 percent.
As such we want to add some logic to our earlier comments this week….the comments about falling oil prices helping put a top in the stock market.Â It appears we should say that a topping oil market is a coincident indicator of a topping stock market, as they are one and the same, indicators of inflation based liquidity coming to a brick wall.Â Today or Monday we should see the S&P 500 hit 1437, 1429 at the moment, and we will be taking our trading accounts into SHORT positions in stocks and OIL.
6:12 AM CDT