PIECES STILL MISSING

Energy prices have moved higher, extending Friday's late session momentum. The market had fallen precipitously from a three-month high of 82.97 earlier in the week. Sentiment turned more pessimistic later in the week as economic data disappointed, particularly Friday's jobs number that came in worse than expectations, adding to the gloom generated Thursday by rising unemployment claims.

Correlation between oil price and equities remains high as the latter has been treated as a barometer of economic prospects, a relationship that has persisted since the market bottoms in early 2009. With talk of deflation increasing, the release of the CPI later this week may have some impact on the oil market. A .2% rise is expected.

The previous several releases registered consecutive months falls for the first time since the Depression. Interestingly, speculative interests increased long positions in crude oil through the latest period, the end of which coincided with the highest price for the week.

Last week's choppiness wll probably continue, this week as every bit of economic data appears to have an outsize influence on the pendulum that swings between skepticism and hope on whether or not a viable, sustainable recovery is in fact underway. This has been the intellectual divide for several quarters and will continue to be so until the market settles that question.

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