XLE Leads Currencies

Tonight I'm just looking at the 1 day results in lieu of the usual 2 day metrics. Oil really took hold today with XLE making over a 5% gain which happens very seldom (Rob Hanna can provide the precise numbers). The surge in the FXE and the drop in the dollar is a situation that merits closer attention before initiating anything more than a daytrade IMHO. Things can happen quickly in this high ATR environment and the major trend remains downtrend despite today's low volume blowoff. In his commentary Thursday night Don Worden noted that in the 32 market days since the April top half of the days have seen the DOW up or down 200 points. 22 of those 32 days have shown over 100 point gains or losses. Feeling a little giddy?
My little darling BP recovered over 12% on Thursday, keeping in mind that was 12% of a value depressed 15% on Wednesday, so that differential is a bit more than 3%. Glad I closed those long puts Wednesday EOD as the same near 25s closed at .41, down .86 from Wednesday's close.
Still, it was an impressive about face probably catalyzed by a number of BP and government spokespersons claiming that BP has plenty of assets to cover a likely $ 1.5 billion claims pool. This, of course, is complete speculation on every one's part trying to cover their arse and basically has the tangible value of hot air. No one knows the full extent of the damage as the oil continues to gush, pollute and destroy the economies of entire cities. Wait till the residue hits Cape Hatteras for the real backlash. With hurricane season setting up, the gunk could move halfway up the eastern seaboard . . a scenario that won't be smoothed over with a mere 1.5 billion.

Despite it's poor showing Thursday UUP still has one of the most bullish longer term charts along with NEM. Statistically the FXF looks like it should be a winner but the chart is just plain awful.
To be avoided.