How’s the Oil Pressure – May 28th 2021

The summary charts at the end of the newsletter tell the tale. Global markets were all green. Commodity markets were mostly green. Most growth and cyclical sectors were green. While the market still has some work to do, the broadening backdrop of global markets improving helps. It’s really up to the Nasdaq names to get the $SPX out of its’ month-long frump sideways. We are still where we were for the Fed meeting at the end of April and the April 16th Options Expiration.

This newsletter has a lot of focus on commodities. More than usual as this seems to be one of the big positive areas of the market that has stayed off most people’s radars for years. I’ve been banging the drum for a while, and the moves have been massive, but we have more gas in the tank it would appear.

Greg monologue – In the face of all the bad news for the oil business this week, oil looks set to take on a run to $75. Gasoline demand was higher this weekend, – 7% higher – according to Whenever someone complains about the high price of gasoline, please mention that it is solely due to the governments’ inaction on opening mines for more metals to create and move electrical energy. Economics 101 – Oil prices are forced up as the governments continue to shame the industry into not replacing reserves. This makes both forms of energy – Liquid and electrical – scarce and forces the price higher. Please ask them to pressure politicians rather than abuse the very source of liquid or electric energy they want to buy.

Almost all commodities were running hard this week. A new closing high for oil, but down on Friday. I continue to hold Gold and oil related trades.

Summary: I am not sure if the broad indexes can rally as the FAMTANG names have not rallied for the most part. FB would be the exception. The market momentum is low right now, and I am looking for a catalyst to move the market higher. We are ½ way to the July earnings period now, so maybe than can be it. The lackluster volume doesn’t echo a momentum change like the ravenous days of early 2021. The commodity trade looks set to reward us with more upside. Start focusing on tech lows as well in case they move.