Whata nice, quiet weekend.

There was very little news of note and, despite a nervous sell-off in early Asian trading, the markets are back to their usual pre-market positions of UP. The Dow is up 100 points since 2:30 am, the Nas is up 2.5% as is the S&P and the Russell. Oil has been jammed all the way back to$70 after falling below $68.50 in early morning trading and the dollar has been pressed back down to 95 Yen while it once again costs more than $1.405 to buy a Euro and $1.66 to buy a pound. It’s no wonder we have such success playing the middle – “THEY” don’t allow the market to go anywhere else!

$70 OilI really thought this morning they’d have trouble holding oil up as the IEA cut its 5-yer oil forecast for EVERY year through 2012 by 3 Million barrels a day (3.5%). In fact, according to the IEA, oil will not return to 2008’s consumption level of 85.6Mbd UNTIL 2012. “The deep economic recession that has spread worldwide in the past year has taken a severe toll on oil demand,” the IEA said in the report, updating estimates made in December. “This marks a break after several years of strong oil demand growth.” In its “lower GDP scenario,” which assumes that a rebound in the global economy will be 3 percent a year, the IEA said global oil demand could fail to reach last year’s levels by 2014, standing at 84.92 million barrels a day, 6.34 million barrels less than predicted in December.

Bloomberg led off this morning with the headline “Commodity Rally May End as Supply Rises, SpeculatorsSell Bets” but not all speculatorsseem to have gotten themessageas speculation proceeds apace. “Commodities have gotten a little ahead of themselves,” said Walter “Bucky” Hellwig, who helps oversee $30 billion at Morgan Asset Management in Birmingham, Alabama. “As long as there’s uncertainty about growth, that’s going to be headwind commodities won’t be able to overcome.” The World Bank forecast for this year’s economic contraction to be 2.9 percent, rather than the 1.7 percent decline previously anticipated, may curb sales just as producers expand output in anticipation that the worst is over.

Hedge funds and other large speculators are holding a net 653,915 contracts betting on higher prices, according to an index of combined positions in 20 commodities tracked by the U.S. Commodity Futures Trading Commission. Their net long position reached 854,743 contracts earlier this…
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