So oil rallies a tad. I still believe it is a rally in a bear market. We are just not seeing the demand that tells me we are going to get the beginning of a big drawdown.
As I've noted, this commodity is part of the complex that is coming down off the consumer and we are not seeing the consumer come back to the pump. We are working on 15 straight weeks of a decline in driving.
It ain't over.
Do I think that oil can reverse right here? I say it can bounce, but I do not believe that we will get a fundamental reversal until we see driving turn up, which can't happen until gasoline goes lower.
Commodities trade as a group. The institutions that are long oil are watching gold and sensing the inflation wave is over. They are in that class for inflation. If inflation is peaking as measured by gold, they will sell oil and it will go right back down.
P.S. Will you be there when Cramer makes his next move?
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Jim Cramer Blog Commodities Move Diminishes Stagflation Woes 7/30/2008 10:18 AM EDT The case for stagflation is diminished with natural gas at $8, oil at $120 and gold below $900. And that's good for high-multiple stock buys.
Jim Cramer Blog Fear and Loathing in Oil Stocks 7/30/2008 9:04 AM EDT Energy prices are dropping, but shares have been punished far too much.
Jim Cramer Blog Merrill Starts Process of CDO Dumping 7/30/2008 7:00 AM EDT As long as there are other buyers of the paper, look for other similar deals.
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