Stocks Gain As Home Sales Rise & Oil Pullback...

FUNDAMENTAL ANALYSIS
The Dow gained a modest 68.72 points today as new home sales increased by 3.3% in April and crude oil price dipped below the $130 mark.

The new home sales data was really encouraging as it reinforced the fact that the housing market is recovering. A recovering housing market is always precursor to a recovering economy, and if oil is not in the state it is in now, the market would have staged a strong rally.

Oil was certainly the main driver today as it took a significant dip below the $130 mark. However, we have seen similar pullbacks over the past 2 months with each time ending up higher, so no investors are convinced... just yet. This is why the response in the stock market is relatively muted. with another sabotage on oil pipelines today and OPEC not considering supply boost until September, the fundamentals remain intact for higher crude oil prices. The only question now is; Will the drop in supply keep up with the drop in demand due to higher prices? When demand drops way faster than supply, we can be certain of lower crude oil prices. Limited oil supply has been guaranteed by the illegal oil cartel and we all have to live with that, what we can all do to help is to reduce oil consumption by switching to public transport and turning off electricity when it is not needed. When we all act together, no illegal organizations can reap us of our hard earned money and our beloved lifestyle. Together, we can make a difference. Together, we can bring oil prices down! Here's a few simple things you can do today to help yourself and the world:

1. Keep your car in the garage for at least 1 day a week.
2. Switch to public transport when commuting during peak hours.
3. Car pool if you and your colleagues stay near to each other.
4. Switch off your living room light when watching TV at night.
5. Turning off the air conditioner when the room has been cooled down.
6. If you are considering buying a car, consider buying a smaller capacity car and not one of those V8 or V10 environment destroyers.
7. Turn off the TV when not watching. If you need some sound in the environment, use your ipod.

Remember:

TOGETHER, WE CAN MAKE A DIFFERENCE. TOGETHER, WE CAN BRING DOWN OIL PRICES. TOGETHER, WE CAN BEAT THE CARTELS!

Tomorrow's oil inventory number is certainly going to be the focus (see economic calendar) and yes, without the Saudi's oil shipment, it is not likely to beat estimates.

TECHNICAL ANALYSIS
The Dow pulled up slightly in the same fashion as on 22 May. It is not yet suggestive that the short term down trend has been broken unless it follows up with a strong up day tomorrow. The 12500 support level is critical. If the Dow failed to follow up tomorrow and breaks down below the 12500 level, the Dow could start an intermediate downtrend. How do you profit with limited risk if the market falls? Using Put Options of course!


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