Gasoline and Heating Oil are both up this morning but not as much as crude as the cracks will likely continue to get weaker from here. What’s also weighing in heavily on the market is supplies. An Energy Department report may show U.S. crude supplies fell 1.5 million barrels for a seventh week in the seven days ended July 15.   Gasoline inventories probably slid 100,000 barrels from 211.7 million.

There are questions that you should be asking yourselves. Does the fact that Greece received a bailout save the country from falling off the cliff? Can the euro and dollar both fall at the same time? Is the U.S. government going to raise the debt ceiling? Are consumers struggling? If salaries are not rising and gas and food keep moving upward the consumer will not have the money to spend. Companies are storing cash and not hiring just in case there is another financial crisis. The stock market continues to rise, in my opinion to create a buffer in case the market does crash. This is when we must trade on fundamentals and news as it streams in.

Inflation is growing and this can be seen due to higher prices in fuel and food. The consumer is just getting back on their feet from the recession. The consumer is expected to spend to keep this country running and yet they are getting taxed more. Salaries need to rise to offset higher prices and higher taxes. Either way the government still gets their money and it allows the consumer to actaully breath. What do you think? Hopefully everyone learned their lesson and have stopped using credit cards as much. 58% of the Friday the 13th have been up over the years.

Crude has barreled its way to the $84.50 level but will face significant resistance here as the market is now on the upper side of the trading range.  $88.17 would be the next level if the November flat price should trade above the $84.50 level but again nonfarm-payrolls came out last week with less than expected numbers and the unemployment rate is still at 9.6% so Crude may be a bit inflated at these levels.  Keep an eye on the USD and the inventory report this week as the USD has been very weak the last two months so there may be room for some profit taking in that market, and that will draw down the price of crude.

Should a company show profits due to the fact that they lay of thousands of people? Is this really a cost savings technique or are companies just worried about their stock price? If sales are lower and momentum seems to be slipping some companies are firing employees. I am all about a free market but when you fire people just to improve your numbers it should not count on the balance sheet. To me this shows a company is struggling.

People are jumping on the band wagon today because unemployment numbers came in better than expected. This is short lived and the support levels I discussed seem to be on track. 1035 is lowest this market can go without causing panic. The S&P could trade between 1045-1065 over the next few weeks. The DOW is trading properly and should be around the low 10,000 level. With stocks getting beat up expect more announcements for M&A. It was mentioned earlier this week that M&A has picked up from a 2 year drought. Typically after a recession companies get swallowed up or go out of business. The thing is did we ever leave the first recession?

Oil has been having a very tough time of breaking this $82.50 resistance level as the market has come down to $81 after the weak jobs report Friday.  Ben Bernanke speaking tomorrow will be huge to this market and it is either a big rally or big drop for the black Gold.  If traders like what he has to say Oil will for sure test the $82.50 level, but if not the market can quickly get liquidated to below $80.  It is a very interesting day tomorrow.

The Oil spill off the gulf of Mexico that BP is to blame for has now surpassed the 8 week mark and there seems like nothing will stop this enormous catastrophe as there have been mant attempts at fixing the damaged hole but to no avail yet.  This hasn’t had too much of an aeffect on the market however the WTI spreads rallied 50 cents in two days last week as there were reports of delaying oil tanker permits from coming in to the gulf bc of the messy seas. Crude now sits at $75 but if this continues to leak then there could be major problems ahead for the oil markets.

http://www.washingtonpost.com/wp-dyn/content/article/2010/05/21/AR2010052101854.html

Crude Oil has now gotten to the illustrious $70/barrel level as the debt concerns in Europe worsen.  It seems as the WTI spreads have finally lead the market lower as the Jun/Dec spread continues to liquidate trading down to -1200 at one point.  Technically this market has a nice support level at $70 from 6 months ago but right now with the USD gaining momentum and supplies still increasing, this barrier may be broken very soon.