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Two Ways To Play: India, China Fuel Crude's Fire


Strengthen your portfolio in good times and bad.

Oil Demand Still Strong

According to Bloomberg, global demand for oil continues to be strong because of fuel subsidies and high economic growth in India and China. In a report dated late July, Lehman Brothers said India and China continue to consume more oil, driven by fuel substitution and power shortages.

Further, Executive Director of the International Energy Agency Nobuo Tanaka said additions in oil capacity don't match the rising demand and that the "market is still very tight." See related article, Professor Andrew Jeffery's Oil Companies, Bureaucrats Caught With Pants Down.

From the Bull Pen: Oil at 100 may be a good risk/reward opportunity. Bulls can play using the oil ETF (USO); sell stops can be set below $80.

From the Bear Cave: Bears might see a downside play in Darden Restaurants (DRI) if oil begins to recover. One can consider initiating a position if and when the stock recovers to $32.

Sotheby's, Victim of Global Economy

Bloomberg reports Sotheby's (BID) dropped the most in four months because of concerns that a slowing global economy would leave its customers unable to purchase art and real estate. Shares of the world's largest publicly traded auction house plunged almost 9% while the broader markets gained.

Consumers continue to pull back in spending as they face higher prices for food and energy. A Sotheby's spokesperson refused to comment on the company's share price. As volatility increases, watch Toddo on TV for more tips for a tough tape.

From the Bull Pen: Boring continues to be the theme. Wal-Mart (WMT) on a pullback to $60 may provide bulls with an upside opportunity.

From the Bear Cave: Bears can consider downside entry in Coach (COH) at its 200 DMA ($31). Buy stops can be set above that mark.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading closed with the Hang Seng -3.06%, Nikkei -1.98%, Sensex -2.31%, Taiwan -3.19% and Shanghai -3.34%.

Over in Europe, we see the CAC -0.86%, DAX -1.24%, FTSE -1.05%

As of 8:30 AM EST, S&P futures are down 17 points to 1215, and Nasdaq Futures are off 24 points to 1713.

A Look At Commodities

Commodities are mostly lower. Crude oil, Gold, silver, and copper

The dollar index is

On the Radar


8:30 PPI (m/m): -0.4% cons.
8:30 Core PPI (m/m): 0.2% cons.
8:30 PPI (y/y): 10.2% cons.
8:30 Core PPI (y/y): 3.8% cons.
8:30 Advance Retail Sales: 0.1% cons.
8:30 Retail Sales less autos: -0.1% cons.
10:00 U. of Michigan Confidence: 63.5 cons.
10:00 Business Inventories: 0.5% cons.

Happy Friday, Minyans! Good luck and have a great weekend!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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