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Remember we do get energy inventory data today.





































This was an “out of the blue” rally. But traders must feel the Fed is doing its market repair work effectively. More likely, the drop in commodity prices eases inflationary pressures but for other reasons that isn’t good. Economic conditions globally are deteriorating, weakening demand for raw materials, energy and well, stuff. The bad news is this will hurt earnings going forward. Some think there’s safety in tech but that remains to be seen.

The sell-off in commodities, should it continue, can help the dollar rally as funds, what we have left of them, are repatriated to dollars. I’ve never thought the euro was such a great currency frankly, especially when hip hop stars and Hollywood types demand to be paid in them.

As spectacular as Tuesday’s rally was, let’s remember we’ve had plenty of these over the past several months which didn’t last. I must say I’m haunted by my own suggestion yesterday that we could have another strong August following a weak July - three in a row?

One bit of advice: there’s nothing wrong with having large cash positions when the Da Boyz are holding the dice.

Today we get energy inventories. Let’s see what happens.

Have a pleasant day.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in MZZ, QID, QQQQ, IBB, XLV, RLX, SMN, IEF, PST, TLT, TBT, DBC, DEE, EWZ and RSX.

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