Oil Booms! And 4 More Thoughts on Today’s Action!

1) Oil Booms!

We just saw the biggest decline in US crude inventories since January 1999. Traders were looking for a 905K build but the EIA report showed a drop of -14.5 million barrels.

Yesterday after the equity market close, the API reported a -12 million barrel decrease, which certainly set the stage for a bullish EIA report.

WTI crude is now up 3.8% to $47.22.

We are still seeing tons of conflicting headlines regarding a change in OPEC policy, so stay on your toes.

2) Biotech Follows Through

Yesterday into the close, biotech got a huge bid after Reuters reported that GW Pharmaceuticals (GWPH) hired advisers after being approached for a takeover.

Today, Gilead (GILD) supported biotech M&A hopes by saying it “feels an urgency” to do deals.

Traders are already looking at Tesaro (TSRO) as a possible target, and that stock is ripping.

More deals would certainly help IBB get above the widely watched $300 mark, which in turn would be a big psychological victory for the bulls.

3) Looking at Bonds/Utilities

EWI is up 3.4% since I added it to my little experimental income model portfolio.

I'm now looking back at adding some US bond or utilities exposure based on my assumption that Fed rate hikes may come slower than many traders expect.

4) Gold Scold

The US dollar is ripping pretty hard intraday  as Treasury yields pick up.

And gold is getting smacked down, with the gold miners (GDX) off -1.7%.

Part of this is profit-taking after the recent rebound on lousy economic data, so I wonder if the gold bugs push back soon.

5) Hot New Issues

The hot post-IPO names are all over the place.

Line Corp (LN) and TPI Composites (TPIC) look great, while Acacia (ACIA) is sliding

If the bears are to succeed, they need to knock these names out all at once. I'd also eyeball Twilio (TWLO) and Impinj (PI).

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