The Dow Jones Industrials past the 11,000 mark for the first time since May 2001. Watch for the media types to begin howling about investors who missed the boat, and undoubtedly this will cause many to jump into the market at just the wrong time.
Could the hype and euphoria carry the markets for a few more rounds before it drops? Of course! In fact, market strategists like Peter Lee feel the markets could continue to new highs before reverting back to the next leg of the bear market phase.
The ideal scenario for the grand finale is a market that sells off and consolidates in the coming weeks, followed by one more euphoric attempt to the upside. Who knows if that will actually happen, we may be witnessing the top now, or over the next week or two.
ON THE OIL FRONT
Energy prices pulled back slightly, but Marathon (MRO) put on a nice performance +$1.27 or 1.9%. After the Unocal merger with Chevron, it痴 become crystal clear that the major integrateds will be on the prowl for additional assets. Marathon and Sunoco (SUN) surely fit the bill.
A few days ago, Marathon said its sales volumes were up substantially in the fourth quarter. They also reported that refining and wholesale marketing margins per gallon would be more than double what it reported a year earlier.
Today, as energy prices dropped, most major oils were flat to slightly down, while MRO rallied. This tells me the street has caught on to the idea that Marathon may be ripe for the pickings.
Oh, by the way. Did you happen to notice GM today? Sometimes it pays to invest when there is maximum pessimism.
I have no idea what price MRO could fetch in a takeover, but if the Burlington Resources (BR), and Unocal (UCL) deals are any indicator, $73-83 sound like reasonable numbers.
Comments (1)
That didn't last very long. A one day high. Now back to sideways for the rest of 06.
Posted by Andrew | January 10, 2006 2:18 PM
Posted on January 10, 2006 14:18