Most of the time, reading the mainstream news articles on a certain financial market is like watching some "Laurel and Hardy" comedy skit of errors. Picture it: The pair attempt to break into a house. Laurel goes in first through a window, which falls shut before Hardy can get through. Then, Laurel walks outside the front door to let Hardy in, only to have it lock on them both.
Here's the difference: There's nothing funny about the mainstream financial media's attempts to force a market's price action through one fundamental "window" --- only to have it slam shut right behind it.
Take, for example, these recent headlines regarding Crude Oil:
- August 3: "Crude Oil Ends Near '09 High On Economic Recovery Hopes." (Wall Street Journal)
- August 6: "Crude Poised For Fourth Weekly Gain On Optimism The Growing Prospects For Economic Recovery Have Improved." (Bloomberg)
- VERSUS -- August 10: "High Oil Prices Cloud Recovery Hopes." (Financial Times)
That makes absolutley no sense. Oil prices rise when the the promise for economic recovery rises -- only to see the promise of economic recovery fall when oil prices rise? I don't think so.
Now, let's get down to the facts. Since plunging to a two-month low beneath $60 per barrel on July 13, oil prices have rocketed 20%. In the days leading up to the market's reversal, the July 9 Energy Specialty Service set the stage for such a move. There, long-time editor and EWI's chief energy analyst Steven Craig recorded a live video update for Crude Oil that included the following close-up:
In Steve's own words:
"Everything's still on track to find a new low here, and move on up. We're not showing any evidence right now that [wave c, in blue] is done. But the first aggressive hint will come if we can get over today's high."
The rally since then speaks for itself.