CLL SP moved exactly after the US Weekly Petroleum Data for the Week Ending July 25, 2008 has been released this morning.

All strong stocks in the energy sector moved up 3 to 5 % IMO on short covering. Long financial and short energy was the play of the last two weeks.

CLL moved up the the upper line of the trading channel ($4.55) in sentiment with the sector. We may see some consolidation here before moving the $4.8 level if the sector reminds strong. Stop loses point moved up the $4.1

Remember CLL has strong fundamentals and should follow the sector.

SP. Going away for 2 weeks. See you on the other side of the $5 range.

Jubak on oil trading:

I think what we've seen in the last month is the unwinding of a hugely profitable trading strategy followed by hedgees and institutional traders in the first six months of the year.

It involved going long oil--buying the commodity and oil stocks--and going short financials. At it's height in June this strategy had returned 125% for the year, according to the Financial Times. That worked so well because financials were sinking like a stone and oil was rebounding from its decline to $125.

But as the financials got cheaper and oil got more expensive, traders started to unwind their play. They bought financials stocks to cover their shorts and sold oil to take profits and to raise the cash to cover their shorts. So financials boom and oil sank. You can see the trade unwinding in the futures numbers were we moved from heavily long oil to recently a short position.

I think traders will start to reverse the long financials/short oil trade they've got on now over the next week or so. The futures market has swung from being net long oil to net short in the last few days. And with a steady drone of bad news--Merrill yesterday--financial stocks don't look like such low risk, sure things as they did before they rallied 50%.

I believe that we'll see a swing back to oil--especially since we're about to see earnings reports from the oil majors over the next 10 days--with money coming out of financials. If I'm right, it's too late to sell oil--we ought to be buying instead. $122 was the 100-day moving average.

We're through that today. $110 a barrel is the 200 day moving average. I'd expect that to hold since at $110 going long oil is a low risk trade. All this is short term. Longer term important to note that $110 is below the $120 or so reversal during the last oil price dip.

I'd say we're seeing oil set up in a trading range for the rest of 2008 rather than looking for a resumption of a big rally that takes us way above $145 on a lasting basis.