It is obvious that the President is not "feeling our pain" at the pump and seems that somehow he is unconcerned about the impact that this might have on the economy. The truth is that he could help gas prices dramatically by sending a message to the market that he was going to get the budget under control, quit spending money and reduce the deficit even more then the Republicans are asking for. If he led on that issue he would take the pressure off of the Fed and they could quit printing money, the dollar might rally and oil might fall.
In China signs of unrest are starting to reappear as well. In North Africa and the Middle East it is called the Arab spring, in China it is called the Jasmine revolution. China is mounting a crackdown on dissent and the internet, yet the Jasmine discontent keeps popping up.
In Bahrain reports of the government going house to house and arresting people and people disappearing is raising concerns that Bahrain could boil over this weekend. In Syria a government crackdown on dissent was unnoticed by Iran perhaps because they were too busy cruising Bahrain. The world is wacky and will look even wackier as we head into the weekend.
In an interview I did with Eric Rosenbaum at The Street, he wrote, "Yet equity and commodities analysts were coming back to the technical trading and psychological triggers for action in digesting the latest move up in crude. The comparison between the fresh highs in the price of U.S. crude versus the Sept. 2008 crude oil prices before the financial crisis ensued, isn't just an academic exercise, according to Phil Flynn, market strategist at PFG Best. The PFG Best strategist, who recently bet on the move up from $108 to $110, said there could be a short pause here, but likely only a short pause as was the case before crude oil moved up from $108 to $110. The next key level is $111, and it's key because if crude oil can hold $111 it makes a long-term target of $120 a more reasonable assumption. ‘That's not a crazy prediction, that's a technical prediction,’ Flynn said.
“The PFG Best strategist said the last time the oil trade and the market were in this territory was back in September 2008. ‘Technical trading follows the saying, 'You meet the same people on the way up as you do on the way down'’ Flynn said. ‘You get the same resistance on the way up as on the way down,’ Flynn explained. During the week of Sept, 26, 2008, U.S. crude oil hit $110.31, and that was the ‘last gasp’ rally for crude oil before it tanked and the largest peak to valley trough in the oil market ensued. Flynn noted that after the summer 2008 high crude price of $140, crude tanked and it was only in late September 2008 that crude oil rallied before heading even lower. ‘In September 2008, crude oil failed miserably at holding the $110 level and so is this the last gasp of a bull market, the last resistance point before we pull back?’ Flynn asked. He concluded that if oil moves up to $111 from here it's an important milestone."
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 pflynn@pfgbest.com.
