Energy Market Updates

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New Normal

Futures Plunge as Data shows Economy Soft

I feel like I have said this before, but what a difference a day makes!  With yesterday market making its own reality, today i would say it got kicked in the pants BY reality.   Futures started the session down hard and sold off heavily as a string of bearish data got reported.  First was the July Home sales report that showed sales fell by roughly 3.5%, second was the jobless report for last week which increased by 9000 new claims.  Generally not a good sign with an already weak economy.  Lastly, Morgan Stanley downgraded their outlook for the remainder of the year, and within the report noted that it was cutting GDP estimates by roughly .3%.  So what does all this mean?  "There is Gold in them there hills"...  Generally, news like this would push Commodities higher as equities would absorb the brunt of the sell off, but with values of Crude and products perceived to be overpriced, the selling carried over to the NYMEX.  Keep in mind what we mentioned a few weeks ago,  in order for things to start to improve, it has to start with cheaper fuel prices.  Where that level is, only time will tell.  At the close, Crude fell$5.20 to $82.38, RBOB lost .0871 to $2.7832 and HEAT shed .0868 to $2.8748

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Markets plummet early on hit of HVT #1

On a day that for most of us was 10 years in the making, the sight of pits being down almost 9 cents  early this morning was almost surreal.  Over the last few months we have talked about "risk" or "violence" premiums built into the market, but today it was all about the "fear" premium that was erased overnight.  However, the Market being what it is, found a way to battle back and even trade higher for much of the session.  Finally finishing lower on the day with Crude falling .41 to $113.52, HEAT losing .0237 to $3.2521 and RBOB lading the charge falling .0505 to $3.3479.  As many talked how the removal of Bin Laden from the scene was a major win and will have impacts in the future of the markets, others began to chat up the power vacuum that may occur inside Al-Quida.  Most Political figures stressed the importance of remaining vigilant in the fight on terror.  Some cities even issued new warnings. All of us can remember life and markets pre 9/11 and in this "New Normal" market, we have always said that there needs to be an event or catalyst to change sentiment and direction.  This is the biggest one we could have had. 

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