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August 31, 2005

Impact of reversal in energy futures, Wed., August 31, 2005, 4:21 PM

Late in the day, the energy futures market pulled back significantly, and as a result, the broad equity market was able to close on a strong note.

In fact, the daytraders seemed to be happy that the three-year trend line (support) held. Also, the very short-term down sloping trend line (resistance) was broken late today.

I suspect that the Bulls are pleased, and that for now at least they are relieved that the Bear didn't give them a serious clawing.

So for today it was the Bush Administration to the rescue after Energy Secretary Bodman announced the government would tap an emergency oil reserve to compensate for shutdowns in the Gulf of Mexico" because of Katrina.

Yes, there will be lots of new cash going into the economy, which will keep interest rates and bond yields down, but isn't that what worries Greenspan.

And what about the permanent economic losses being suffered now and for weeks if not months into the future because of this storm? Extra money spent by people on fuel, and additional replacement items, is adding neither to savings nor investment. But the debts of people and governments are growing.

I suspect the Bulls and the Bears will be head to head again tomorrow and for a few days after that before this cycle plays out.

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This evening, I will not be publishing, nor permitting reader comments, while I switch computer servers (about 3 hours). You will not notice any differences. I'm hoping that the system runs a little faster for you and that the new version of the MT Publishing software will be helpful to me as well.

Posted by Posted by Bill Cara on August 31, 2005 04:23:02 PM | Category: Cara Today in the Market

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