As they say, when something goes up on bearish news, it’s probably time to buy. When they weren’t able to push oil lower yesterday on that ridiculously huge build in crude inventories of 9M barrels, and oil actually ended higher, we might’ve found a short term bottom for oil and have begun the bounceback rally. Since oil’s the commodities General, all the commodities from energy to agriculture to metals are bouncing with vigor today.

The commodities (and the companies fund managers treat like commodities- including my beloved McDermott (MDR), now in a wheelchair after having is legs cut out from under it) have dropped basically in a straight line since end of June/early July, so a bounce was inevitable. Moreover, the commodities and the collateral damage of related names have fallen so far so fast, all so far below their 50 day moving average, 200 day moving average, you name it, that this countertrend rally would likely have some umph and last for a while. [Nucor (NUE) closed at $52.5 and it’s 50 day moving average is nearly 20% higher around $63!] I’m ready to add to these sectors to ride the relief rally, but keeping in mind the magnificent commodities uptrend of the first half of the year has been broken. Unless there’s reason to believe otherwise, I shall treat this rally as what it is, a countertrend rally in a downtrending market, and sell into this rally.