Makret Closer---The New US Energy Policy

Let's take a look at the Big 3 indicators:

Oil pulled back today after a record run on Friday, and large gains on Thursday.
(Think is it going up tomorrow and in the near future?...We do)


The Dollar was up today on Paulson "speak"(talk is cheap and does not last along time usually. Although, they seemed real concerned!)

Dow Futures for Tuesday. 12:10 AM they are showing -49 on the Dow @ open.


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The "New US Energy Policy" is what we are facing just weeks before the June 24th FOMC announcement by Mr.Bernanke. If this were a gunfight, Bernanke would scream..."I am almost out of bullets, and Treasury Secretary Paulson would yell back, "Intervention is never off the table".

Paulson said that today, and Bernanke has to be thinking over his lines for the 24th.

If the Fed keeps rates the same for the next 6 months, interest rates might drift North from where they are knowing that sooner or later they will have to raise the rate to combat inflation. Depending on where we are in the cycle and the amount of recovery that has actually taken place in the credit markets, higher rates could impede US profits.

The chances are very slim, but what would happen if the Fed lowered rates?
This would help equities and will probably give oil the boost to $150 or 200 per barrel.

Bernanke has to give the "stimuli" package a chance to work(which we think we have seen the results of the stimuli package in the WalMart report last week. They cashed 350+ Million in Gov checks)Excuse me while I get a bucket, I think I am sick with the idea that this will have anything to do with this economic recovery.

In the meantime, the Stock Market is going to tell the Fed(between now and then, how bad things are and whatever the Fed decides to do, it should assist the Stock Market)
that they need to be subsidized by lowering rates or other assistance. But this is going to fall on def ears while the Market tanks either right above or below current lows(watch 11700).

Stuck between a rock and a Market is where the Fed is now. And the legislative Branch knows it. You can follow this soap opera on almost any financial channel.
In the next year, you will see several proposals to legislate the Financial Industry to death. This might be the real catalyst for change that leads to lower levels on the Dow in the coming years. The Financials have put themselves on the chopping block and may pay a hefty price for it. Since they lead the Market in good times and bad, we may be watching a fallen leader go in hiatus for some time.

Good Fortune from Trade-Equity.com!