Phil Flynn: The Manic Month Of May

Sell in May and go away? That would have worked in the petroleum markets so far. Of course if you looked at a chart of the markets you might be sick to see how much money you may have given back. The bulls started the lusty month of May lusting for new highs which they got on light holiday volume as the lead month oil contract broke out to a high of approximately 8715 on May, 3, 2010. Those lofty highs were only fleeting as Greece debt fears engulfed the global market place crushing the optimism of April into the fear factor of May as oil came crashing down to what was a flash crash low of approximately 6424 on that fateful May 20,2010.This manic month of May has been gripped by fear and loathing as to the state of euro zone debt.

The market feared that the PIIGS (Portugal, Ireland, Italy, Greece and Spain) would bring down the global economy. We even had a mini “flash crash” as protestors surrounded the Greek Parliament. Oil fortunes both good and bad have been dictated by sovereign debt fears but also because of a back drop of a massive over supply.Yet oil has staged an impressive comeback. Rumors that the Chinese were going to reduce their holdings of European debt and euro currencies were denied and that seemed to ease the markets' concern. The denial sparked a massive across the board commodity and global stock rally. We also had end of the month short covering as many traders headed....Read the entire article.

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