5.18.07
The market was mixed again this week with the Comp, NDX, and the R2K all moving sideways or down a tad. The Dow and the SP 500 were up nicely. This would be a indicator that money is moving into the large caps and not the small or mid-cap stocks. We spotted this trend several weeks ago and moved away from the Russell and into the SP 500. The R2K had been a leader in this market for quite a while but now seems to be out of favor for the present. The Dow is getting all the attention now, setting new records almost every day. The SP 500 is only five points off of its all-time closing high of 1527.46. We still remain in a BUY signal and recommend either the Dow or the SP 500 as your investment of choice. Raw gasoline was down 3 days in a row last week but prices at the pump continued to go higher. We may get some relief after the holiday week-end next week. This gas gouging is starting to look a lot like what Enron did with energy prices in California a few years back. Enron and Exxon, hum…. has Ken Lay come back to haunt us?
Gasoline futures surged Thursday by 9.7 cents, or more than 4%, to $2.4340 a gallon. Stockpiles of gasoline in the United States are roughly 7% below a year ago after prolonged refinery maintenance and a rash of operational glitches slowed production. U.S. imports of gasoline jumped recently to make up some of the shortfall — rising to the fifth-highest level on record at 1.5 million barrels per day last week — but investors have taken little comfort. "There's still a relatively low rate of refinery runs — the current tightness in gasoline is unlikely to ease in the short term," said Makoto Takeda, analyst at Bansei Securities. Thursday's jump in crude oil was tempered by news of the end to an occupation of an oil hub by Nigerian villagers who had forced Royal Dutch Shell to cut output by 170,000 bpd. Militant attacks have shut nearly 900,000 bpd, or 30% of supply capacity, from Africa's biggest oil producer — depriving refiners of crude prized for its low sulfur content. The Nigerian disruptions, together with worries over Iran's dispute with the West and supply cuts by the Organization of Petroleum Exporting Countries, have pushed crude well above a January low near $50. Consumer nations have called on OPEC to open the taps, but the group, which supplies a third of the world's oil, says it sees no need to act. Its next scheduled meeting is in September.
Till next week
The MTA staff
