Still we look to find a reason to believe. If I listened long enough to you, a bullish case I guess you could make do, knowing that supplies are high worldwide. Still I look to find a reason to believe.
The bulls need something to believe in as a plunge in existing homes sales is another dagger in the heart of the bullish case. The drop caught many by surprise as the existing home sales hit the lowest level since 1995 and fell by a whopping 27.2%. The stock market and oil market already rattled about recent economic happenings, had a hard time shaking off the number as the mood turned gloomy.
The bearish real estate number brought up talk of a double dip recession and even the debate whether we ever got out of the last one! Others do not want to be even that optimistic as they say that this really is a depression. Noted Gluskin Sheff Economist says forget the recession talk the U.S. economy is in a 1930s-style depression. Will Deener at the Dallas Morning News writes that Mr. Rosenberg said in “a recent report that even Fed officials have lamented that the economy has "no sustainable underpinnings.”Let's not keep our head in the sand and stay in denial," he wrote. "When the central bank has taken rates to zero, tripled the size of its balance sheet and the government has bailed out banks and homeowners and embarked on an array of spending initiatives, we have a totally different experience on our hands."
And if that news wasn’t a bad enough sign for you the Wall street Journal’s Steve Russolillo writes that “The Hindenburg Omen reared its ugly head late last week, signaling more doom and gloom as stocks plod along amid the dog days of summer.” He goes on to say, “The Omen, a technical indicator which uses a plethora of data to foreshadow a stock-market crash, was tripped again on Friday, marking the second time since Aug. 12 it has occurred. (It also came close on Thursday, but one of its criteria fell short.) The latest trigger has prompted the Omen’s creator, Jim Miekka, to exit the market. “I’m taking it seriously and I’m fully out of the market now,” Miekka, a blind mathematician, said in a telephone interview from his home in Surry, Maine. “I would’ve probably stayed in until the beginning of September,” depending on how the indicators varied. “That was my basic plan, until the Hindenburg came along.” The Omen has been behind every market crash since 1987, but significant stock-market declines have followed only 25% of the time. So there’s a high likelihood that the Omen could be nothing more than a false signal.”
Could plunging gasoline demand also be a bad omen? According to Barbara Powell at Bloomberg news U.S. gasoline demand fell 1.2% as the summer driving season neared an end, MasterCard Inc. said. Motorists bought an average 9.46 million barrels of fuel a day in the week ended Aug. 20, down from 9.57 million the prior week, the second-biggest payments network company said today in its SpendingPulse report. Demand last week was up 0.9% from a year earlier, the eighth consecutive year-over-year gain. The four-week average demand was up 1.4% from a year earlier. Still Year-to-date, fuel consumption is only 0.9% above the same period in 2009. The softness in demand and a softness in crude prices sent RBOB to an eight-month low.
Still despite all the bad news oil failed to break some key support! And despite the fact that I am still looking for a breakout to the downside you have to realize we could see some snap backs. Part of the recovery is technically based and part of it is because of an attack on Iranian-Turkey pipeline. We still feel the best way to trade this market is like a wolf! You can be a bull in the morning and a bear in the afternoon! You can even howl at the moon if you wish!
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org