The Revenge of the Scarsdale Effect - Macro Outlook for December 13, 2006
In the past, I've warned you...
In the past, I’ve warned you when a sudden rise in oil prices was coming down the pike using an esoteric formula known only to those of us who have stood on a Metro-North platform waiting in the freezing slush for a late commuter train into Manhattan.
Today I want to warn you of the exact opposite: Right now an announced drop in oil reserves has everyone’s attention, causing both futures to rise and the stock market to fall.
Don’t buy into either one! Oil won’t stay up and the market won’t stay down, at least not in the short run for one simple reason: The Scarsdale Effect.
Simply put, the traders of the NYMEX are not freezing this week. Can it really be that simple? You bet, at least in the short term. Barring a major disaster, these guys pretty much depend on gut call to set prices.
A little rain, maybe some fog, temps in the low 40s? This is not the stuff of misery, or rising heating oil and propane prices, at least not this week.