Oily Crunch.

The soaring crude oil prices of late to $123 per barrel for the first time is creating a new 'financial greenhouse' effect creating a deep hole in the pockets of consumers.“Ironically, the latest jump in oil prices has put stocks back under pressure and pulled [bond] yields down to session lows, despite the inflationary implications that continue to haunt the Fed,” says Action Economics.Rising energy prices are acting to depress economic growth, putting a strain on consumers’ purchasing power but not being passed through to wages and not feeding the inflation wage price spiral.The International Energy Agency (IEA) has wayback in July 9,2007 issued a warning that the world will be increasingly experiencing an oil supply crunch with prices to soar to unprecedented levels over the next five years. The basic facts are that demand for oil will rise by 2.2 percent a year between now and 2012 - up from a previous forecast of 2 percent - as the world's economy expands at 4.5 percent a year.Lawrence Eagles of the IEA warned: "The results of our analysis are quite strong. Something has to happen. Either we need to have more supplies coming on stream, or we need to have lower demand growth." Production of bio-fuels is set to reach 1.75 million barrels per day by 2012.There are two problems confronting bio-fuels, which will hinder further growth. First is the fact that diverting corn into ethanol has caused a doubling of global grain prices which has resulted in larger than 10 percent rises in food prices in many countries such as the United States, China, India, Mexico, and in other developing countries.
Second is the economics of fuel production. It seems to be a fact of life that wherever we turn to make new fuels, we find it cannot be done without expending enormous amount of our resources such as electricity from burning fossil fuels and water, defeating the original purpose.

Tracking the Dow on Wednesday,07/05/08.

9:30am--Opening day with a mild gap-down say around 15 points.

Walt Disney (DIS) reported earnings of $0.58 per share, topping expectation.Cisco Systems (CSCO) beat its earnings estimate by two cents.

10:30am--Index still flat with the range between H+L too tight.News hit:-March U.S. pending home sales fell 1.0%.This doji shooting star is dubious,it can also be a graveyard doji.

(H13,030+L12980)/2=MAV13,005.Candle pattern now it's a hammer.Open sell short position @13,010 since it's above MAV.

11:30am--Ah,it's a bearish stick with another new hour low.Crude was trading up 0.2% to $122.15 per barrel.Crude stockpiles for the week ended May 3 rose by 5.7 million barrels.Financial stocks under hammer.The main index pattern has now changed to a black bar.Let's hang on.

12:30pm-- First quarter nonfarm productivity rose 2.2%, which was more than the consensus estimate of 1.5%.Acess today's events,all are negative news.The range is now (13,040+12,940)/2=12,990.Index price at 12,960 ie -30 from MAV.A small technical rebound here with a morning star so decide to fight with it.Hang on.

1:30pm--A new low again.All the black stagnant black crows.Nine of the ten economic sectors are now in the red.Hammer candlestick along the way.

2:30pm--The stock market is under selling pressure, as it falls to fresh session lows.A black graveyard doji below the long bar.

3:30pm--It's near to injury time,difficult to score any hattrick goal.Close position buy back(long).

4:00--The final bell candlestick is a rock bottom bull waiting to short-cover.A rebound tomorrow.

Friday is the Evening Star

Tuesday is the Hanging Man

Wednesday is the Pivot day of the week-MAV so the market makers have completed their agendas.So the new musical chair will start again.