Another week of the market being held hostage by Oil and the Financials/ Brokerages has passed. But, heading into this trading week we're possibly in a position to see a 'change of pace' this week as GS and others in their group report, while Oil is on the verge of doing something from a technical analysis position ( forming a pennant formation). Hopefully, these dynamics can make the market move in either direction just to give some clarity. The only positive to possibly takeaway from last week for the overall market was that Fridays move didn't fizzle out like every other move during the week. We're not overly excited about the action, we were more excited by the continued strength of our heavily followed as at least 8 put in New highs. Of course, this consists of Coals ( ANR PCX MEE JRCC ), Ag-Chem ( IPHS MOS) and those Oil Shale plays like GDP. The theme heading into this trading week remains the same from last week..."When we are trading, we are sticking to those favorite Ag-chems and Coal and our Haynesville Oil Shale stocks,.."'
We've updated the Shadowlist and have included the GMXR XCO Shale plays noted before, while removing the Shippers and China stocks to a secondary list for now.
A few have asked why we follow the $CRX and not the CRB index. The reason is the Morgan Stanley consists of individual stocks with some of our favorites being the 2 largest positions POT 6.7%, X 6.55%, while the CRB uses a 4- tiered approach to allocating among commodities included in the index. Group 1 includes only petroleum products with Crude Oil having a 23% index weigh. We simply find the $CRX a better measure as it's based on shares of widely held and therefore seems to give a better insight to intraday activity of where our stocks may go.
As long as our groups show leadership in an uncertain market, we won't stray...unless it's to bet on Tiger Woods today.