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T3’s Take 3: The Monster Mash

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1) The Monster Mash
The market has been scary lately. One day up, the next down. The ghosts and goblins have been out for the better part of the last two months.

With the FOMC announcement later this week and the U.S. Presidential Election next week, most are expecting the markets to stay fairly quiet.

The S&P 500 continued to poke at lower support around 212.00 but never got enough momentum to decisively break it. We saw the most strength in the Utilities Select Sector Fund (XLU) which surged to a 2.00% gain.

The Nasdaq was dead neutral ahead of Facebook (FB) and Alibaba (BABA) earnings on Wednesday closing down, 0.02%.

The Gold Miners (GDX) was back in rally mode, gaining 2.98% and oil was weak following another disappointing OPEC meeting, closing down 4.36%.

2) More M&A News
On Monday, General Electric (GE) announced that it would be merging its oil and gas business with Baker Hughes (BHI).

The deal, unlike AT&T/Time Warner, is unlikely to cause concern to regulators as the two businesses complement one another.

Shares of BHI were down sharply, closing -6.29%.

Both Halliburton (HAL) and Schlumberger (SLB) shares were also down today.

GE Chief Executive Jeff Immelt said, “This is a very compelling time for the deal,” in reference to North American oil and gas producers getting back to work after essentially a freeze in activity going back to 2014.

3) OPEC Jawbone

This afternoon, T3 Live’s Jeff Cooper provided the following insights into the today’s action in Oil:

The Soup Nazi sell signal on USO 10/19 flagged in this space did a good job of identifying the current pullback in oil.

After last week’s Grail Fail at the 20 day line, this morning we have a gap below the 50 dma.

USO looks lower.

Leaders like EGN are extending to downside. Ditto REN.
In the interest of fair disclosure, EGN was a short idea from the last nightly report.

Jeff went later said,

Oil is tanking again. The false breakout over the 51 square-out off this year’s 26 low brought in sellers on the failure.

OPEC’s Fed jawbone look alike contest is the culprit.

They can’t cut because they have nothing else to sell.

If 46 breaks, it gets uglier.

Click here to learn more about Jeff Cooper’s Daily Market Report