Turnaround Tuesday started ordinarily enough until news appeared from unconfirmed news sources that Russia and Saudi Arabia had agreed to price freeze in oil production as "the news".
The sources were featured below:
SAUDI ARABIA, RUSSIA REACH CONSENSUS ON OIL FREEZE: INTERFAX
INTERFAX SAYS SAUDIS TO DECIDE ON OIL FREEZE REGARDLESS OF IRAN
INTERFAX CITES UNIDENTIFIED PERSON ON RUSSIA, SAUDI CONSENSUS\
RUSSIAN ENERGY MIN. DECLINES TO COMMENT ON IFX OIL TALKS REPORT
RUSSIAN ENERGY MINISTRY SAYS NO COMMENT ON TALKS BEFORE APR. 17
This drove the algos sufficiently nuts to ramp stocks higher in another short squeeze. But how valid is all this news? Let’s remember a freeze should it occur doesn’t reduce supply or theoretically prices. What these type events have always led to is cheating and/or a lack of cooperation by other producers. Is Iran, Iraq, Venezuela and others going to participate?
All these facts don’t matter as stocks, heavily correlated to oil prices followed along higher tick for tick. From Zero Hedge is the following chart.
Other news this day just doesn’t matter no matter the quality unless you find Facebook’s Zuckerberg’s and Hawking’s joining forces to investigate for aliens news.
Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).
Volume was average and breadth per the WSJ was positive.
Chart Of The Day
The tape says it all as oil rallies sharply. We get more oil inventory but bulls have ramped it with a focus more on the Doha conference this coming weekend.
Let’s see what happens.
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