As you all know, crude oil and its products have been hammered of late. One has to wonder if the Saudis' decision to not reduce output was a deliberate attempt to go after the US fracking industry. Either way, the energy complex has been hit extremely hard over the last six weeks. Just look at the following chart!
The XLE had lost 22% over that time frame before some decent buying finally showed up today which enabled it to close up on a day in which the entirety of the US equity markets were getting clobbered.
Maybe the worst is over for crude? I don't know for sure but I am definitely going to be keeping an eye out on the XLE to see if it shows any upside follow through tomorrow and certainly on Friday.
As I type these comments, crude is down another full dollar to $80.73 in the early overnight trading.
Yet another thing I felt the need to point out and that is related to the reported holdings in GLD. It showed a DROP in the tonnage this afternoon which is really disconcerting if one is a bull. It lends credence to the idea that some are selling gold to keep the margin clerks happy with the equity positions.
Total tonnage fell 2.09 tons from the last reported number and currently sits at 759.14 tons, down 39.08 tons on the year and the lowest level since early December 2008.
Lastly, this is the updated TIPS spread/Gold chart from yesterday. Since then interest rates have fallen sharply (* today ) so it will be interesting to see what numbers we get tomorrow when the update is complete. Notice that gold has been moving in the opposite direction of the spread the last few days, something which is out of the more normal behavior, indicating the metal is functioning as a safe haven for some.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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