Prices Have Found Support, But Bearishness Still Looms

Crude has halted its downturn and is finding support as equities rally modestly on a mixed bag of news.  As long as nothing is decidedly bearish, most investors are willing to be optimistic rather than pessimistic.  It seems like the market in general continues to make excuses for the sub-par employment picture and more recently seem to be surprised by the divergence between initial jobless claims and other employment data.  We remain concerned that employment is not as strong as advertised, especially with the level of government payments in the form of unemployment benefits being sent out to nearly 5 million individuals. 

Equities will continue to dictate energies general direction, but with leading economic indicators turning over, recent data showing a slowing rate of improvement, and with energy inventories at extremely high levels, we feel that bearishness still looms.