Oil Stocks Revisited...
If you needed any more proof of the importance of oil stocks to this "falsely buoyant" market, all you have to do is take a look at ConocoPhilips (COP is its aptly-named ticker). The stock is flying, after the company reported stellar results this morning... Consequently, the XLE (the Energy Select Sector Index) is being dragged 1-2% higher as well, thus supporting the SPX, which incidentally went all the way up to my 1205 overhead resistance level this morning, and then proceeded to slowly retreat from there. I expect this level to be broken before long. There is too much nervous money on the sidelines afraid to "miss out" on the usual 4Q rally this time of the year -- performance anxiety is a powerful motivator for fund managers to follow the herd, so to speak. As long as the SPX index doesn't break the 1168 level on the downside, one could actually say that the bulls have won the tug of war against the bears... for now.
Speaking of that tug of war, I found this article absolutely fascinating. While the bulls seem to have won "the battle" for now, the longer-term picture, say 2006 and beyond, does not look pretty at all, one of the main reasons being that inflation may be raising its ugly head again. I couldn't have said it better than Barry Ritholtz. It is worth reading his thoughts if only to understand to what extent Americans like to look at their economy with rose-colored glasses. And who's going to deal with the consequences when Super Al (lucky or smart, he is still considered super, given that he has continued to assure investors that the Fed is here to bail them out of all sorts of troubles) retires? We found that out the other day -- Mr. Ben Bernanke who was nominated by Bush, and who seems to be the man that the Street wanted the most, and therefore is expected to be confirmed without too much fuss. Here is his behavioral finance profile. He is definitely smart and educated, but can he really, really fight Barry's definition of inflation?? We'll soon find out -- March 2006 to be precise.
Speaking of that tug of war, I found this article absolutely fascinating. While the bulls seem to have won "the battle" for now, the longer-term picture, say 2006 and beyond, does not look pretty at all, one of the main reasons being that inflation may be raising its ugly head again. I couldn't have said it better than Barry Ritholtz. It is worth reading his thoughts if only to understand to what extent Americans like to look at their economy with rose-colored glasses. And who's going to deal with the consequences when Super Al (lucky or smart, he is still considered super, given that he has continued to assure investors that the Fed is here to bail them out of all sorts of troubles) retires? We found that out the other day -- Mr. Ben Bernanke who was nominated by Bush, and who seems to be the man that the Street wanted the most, and therefore is expected to be confirmed without too much fuss. Here is his behavioral finance profile. He is definitely smart and educated, but can he really, really fight Barry's definition of inflation?? We'll soon find out -- March 2006 to be precise.
posted by Ivan at 10/26/2005 12:08:00 PM
0 Comments:
Post a Comment
<< Home