How the US is Winning the War Against Terror

What's Happening

The pre-market stock futures were rallying, as the first five days of the new month might prove to be seasonally strong. The U.S. Dollar was falling. Asian markets were stronger. European markets were rallying. U.S. Treasury bond yields were stable. The U.S. Ten Year note was trading with a yield of 3.99% in electronic trading. Crude oil was trading near $36. Gold was trading below $400.

The economic calendar for March 1, 2004. January Personal Income. January Personal Spending. January Construction Spending. February Manufacturing ISM.

The Ides Of March

"Beware the Ides of March." So the soothsayers told Julius Caesar, who ignored them. And of course the rest is history.

And as we approach the middle of the third month of the year, we can't help but noticing that there are a great deal of potential points of drama that might just come to a head, somewhere in that time frame.

The U.S. election could well heat up by then especially if Senator Kerry all but wraps up the nomination by then. The Bush administration will by then have unveiled its negative attacks. Russia's Putin should be re-elected in that time frame. And it is always possible that Mr. Bin Laden could be in U.S. custody, dead or alive by then.

Two major hot spots in the world could also heat up in a big way by then. Venezuela is definitely near the boiling point. And any little thing could always set Iraq off.

The signals coming out of Iran lately, suggest that major developments could surface there as well.

Unifying all three hot spots are oil prices, which if they were to follow a seasonal pattern of some normalcy, should begin to slip lower by then as well. They haven't begun to do so, as yet.

Add the ever present threat of some kind of terrorist attack, and you've got the potential of major developments in and out of the financial markets.

Today, we look at some interesting developments that address those major emerging threads, that could turn out to be yet another reason to remember the Ides of March.

The Ugly Season Nears

The Bush administration looks ready to play hardball. With over $140 million dollars to spend on advertising, and the strength, albeit wobbly of the incumbency, we expect an increasingly meticulous and steady character and policy assassination campaign of Senator John Kerry and the Democratic party.

But, the big question is not that Bush is about to get nasty. Rather the big question is will it work? Our inside the beltway sources tell us that this time is different and that the "Massachusetts liberal" labeling won't work. In fact poll after poll shows that social issues are less important to the public at this point than jobs and financial issues, such as the state of retirement funds, and how much money people have to pay out of their own pockets for healthcare.

One savvy inside the beltway player summarized what in his opinion Bush needs to do win the election: "1) luck: he needs the economy to start producing jobs in significant numbers. And time is running out on that. There is about a six-month lag time between the event and people's recognition of it. Just ask his father: the Bush I recession ended in the spring but it was too late to overcome the perception of a bad economy. ("It's the economy, stupid") And he needs things to go right in Iraq which means something like turning over power June 30, bringing home a respectable number of troops, and nothing going terribly wrong in Iraq until after the election. 2) Or he needs the Democrats to blow it. I don't know what that would look like, but, given past practice, is hardly out of the question."

The source told us "that labeling Kerry will (not) be enough -- this is not 1988 or 2000. Elections with an incumbent president are always a referendum on the president."

Bad Poll Numbers Continue For Bush

Even as Drudge reported over the weekend that President Bush is brimming with confidence and expects to win a close election, CBS News, reported that its most recent poll spells out more trouble for the incumbent. "Some 47% of Americans now approve of the way the President is handling his job, while 44% disapprove. The same poll shows a John Kerry/John Edwards ticket beating one headed by Mr. Bush and Vice President Dick Cheney in the fall election, by a margin of 50 percent to 42 percent." The poll also noted that "Americans continue to express doubts about the situation in Iraq, and point to the economy and jobs as the issues they are most concerned about. Still, voters said they expect a Bush win in November, although that view is less pervasive than it was in early January. Now, 48% expect Mr. Bush to win, and 42% see a Democrat winning the presidency. In January, 55% expected the president to be re-elected, and just 31% thought the Democratic candidate could prevail."

The numbers above suggest that the Bush team is looking for something to take them out of their slump.

And the answer to the first wave of drama designed to transform Mr. Bush from an incumbent slipping into despair, into a re-elected war time president could be in Pakistan, Iran, and all points in between.

Bin Laden Watch Intensifies

Osama bin Laden has been captured and has been in custody for "some time." This according to an AP report quoting a branch of Iran radio. The report was quickly denied, by the U.S. and Pakistan. But the fact that it appeared, in the midst of what is billed by the U.S. as a major operation to capture bin Laden, is certain to fuel conspiracy theories, some of which may be well founded, according to reports issued over the weekend.

The AP report, dated 2-28, and issued at 8:19 A.M. Eastern Time noted that: "Pentagon and Pakistani officials on Saturday denied an Iranian state radio report that Osama bin Laden was captured in Pakistan's border region with Afghanistan ["a long time ago."]

AP added that: "The report was carried by Iran radio's external Pashtun service, which is designed for listeners in Afghanistan and Pakistan where the language is widely spoken. Iran state radio's main news channel - the Farsi-language service for Iranian listeners - did not carry the bin Laden report. Iran state television also did not carry the report. The director of Iran radio's Pashtun service, Asheq Hossein, said he had two sources for the report. The radio quoted its reporter as saying bin Laden had been in custody for a period of time, but a U.S. announcement of the capture was being withheld by President Bush until closer to the November election. ["Osama bin Laden has been arrested a long time ago, but Bush is intending to use it for propaganda maneuvering in the presidential election,"] he said."

The official Iranian News Agency, IRNA, confirmed the existence of the radio report, but did not officially announce that bin Laden had been captured.

But other reports over the weekend suggested that indeed something more decisive is under way. The New York Times wrote that "General Musharraf has told the United States, that ["he is now willing to be even more helpful"] in tracking down Qaeda and Taliban militants in the region where Mr. bin Laden is still believed to be hiding."

In fact, the Times reported that: "President Bush has approved a plan to intensify the effort to capture or kill Osama bin Laden, senior administration and military officials say, as a combination of better intelligence, improving weather and a refocusing of resources away from Iraq has reinvigorated the hunt along the border between Pakistan and Afghanistan."

The search may have finally turned the corner due to circumstances in Pakistan having become more serious for President Musharraf. The New York Times added that: "After a visit to Pakistan earlier this month by the director of central intelligence, George J. Tenet, American officials say, President Pervez Musharraf of Pakistan appears to be far more seriously committed to tracking down Al Qaeda and Taliban militants along the semiautonomous border region. ["Two assassination attempts close together tends to be life-focusing,"] said one senior official who is overseeing the new drive, referring to the December attacks on General Musharraf."

"Though the White House denies that Mr. Bush is letting the election influence strategy, some of his aides have privately spoken about the obvious advantages of going into the last months of the election campaign with both Mr. Hussein and Mr. bin Laden in custody. On Friday, Senator John Kerry, the Massachusetts Democrat and the front-runner in the Democratic race, appeared to try to inoculate his campaign from the possibility of Mr. bin Laden's capture, while at the same time faulting Mr. Bush for failing to put together an effective search strategy far earlier."

The Deal That Will Make Life Tough For Bin Laden

The stakes are higher than most realize. And the Bush administration seems to have made its choices.

According to AP, in another report issued over the weekend: The United States has struck a deal with Pakistan to allow U.S. troops to hunt for al Qaeda leader Osama bin Laden this spring in an area of Pakistan where he is believed to be operating, the New Yorker magazine reported on Sunday. Thousands of U.S. troops will be deployed in a tribal area of northwest Pakistan in return for Washington's support of President Pervez Musharraf's pardon of the Pakistani scientist who this month admitted leaking nuclear arms secrets to Iran, Libya and North Korea, investigative reporter Seymour Hersh wrote in the issue that goes on sale on Monday. Full disclosure of Pakistani scientist Abdul Qadeer Khan's activities would have exposed him as ["the worst nuclear-arms proliferator in the world,"] an intelligence official is quoted as saying.

The article, as quoted by AP, paints a picture of a Bush administration that is trying to move beyond the impression that the U.S. has a faulty intelligence community, and that indeed it can get the job done, when it comes to national security. ["It's a quid pro quo," according to a former senior intelligence official. ["We're going to get our troops inside Pakistan in return for not forcing Musharraf to deal with Khan.] Musharraf has also offered other help in the hunt for bin Laden, accused of masterminding the Sept. 11, 2001, attacks on the United States, according to the article. ["Musharraf told us, 'We've got guys inside. The people who provide fresh fruits and vegetables and herd the goats' for bin Laden and his al Qaeda followers,"] the intelligence official added.

Making life more interesting for Bush is the fact that according to Middle East News Line: "The United States will require help from Iran in the effort to capture Al Qaeda leader Osama Bin Laden. A report asserted that Bin Laden could escape the current U.S.-Pakistani effort to trap the Al Qaeda leader and his cohorts -- including No. 2 Ayman Al Zawahiri -- along the Afghan-Pakistani border." Citing a report by the New Dehli-based South Asia Analysis Group, Newline added that "without Teheran's help Bin Laden could enter Iran and find shelter among Al Qaida sympathizers in that country."

And still another sign that things are heating up, and that Iran may indeed play a crucial role in any bin Laden capture, came from the official Iranian news agency IRNA, who reported that "Iran on Sunday categorically rejected claims by a US State Department official alleging that fugitive members of al-Qaeda have taken refuge in the Islamic Republic. ["The claims are baseless since the stand of the government of Iran regarding sectarianism and terrorism is both transparent and a principle one."]

Iran's Desperate Gamble

Iran has put out an assassination contract on Libya's leader Ghadafi. So says the U.K.'s Telegraph. And the revelation suggests that even though the U.S. and Iran are thought by some to have struck some kind of deal with Iraq and the Shiites, and the potential return at some point of U.S. oil companies to Iran, as the common ground for some sort of cooperation between the two openly hostile countries, there is still a great deal of uncertainty.

In what has to be the most bizarre story of the weekend , The U.K.'s Telegraph reported that "Iran is trying to prevent Libya from disclosing incriminating details of Teheran's top-secret nuclear weapons program, by threatening to unleash Islamic fundamentalist groups opposed to Colonel Muammar Gaddafi."

The article quotes unnamed Western intelligence sources as reporting that they: "have learned from interrogation of al-Qaeda suspects, captured close to Afghanistan's border with Iran, that a militant group of Libyan extremists is being protected and trained by terrorism experts from Iran's Revolutionary Guards. Now that Libyan scientists are co-operating fully with IAEA officials and are revealing the extent of Gaddafi's nuclear weapons project, Teheran is becoming increasingly concerned that the Libyans will also reveal details of Iran's nuclear weapons project. Officially, the Iranians deny any attempt to develop a nuclear weapon, claiming that their research programme is designed solely for civilian uses, such as developing a nuclear power industry."

["This is a serious initiative by the Iranians,"] said a Western intelligence official with access to the interrogation transcripts of al-Qaeda detainees in Afghanistan. ["They are desperate to prevent Gadhafi from spilling the beans about either Iran's involvement in international terrorism or in developing nuclear weapons."]

The timing of the news is interesting, as U.S. oil companies are tripping over themselves to return to their abandoned oil haunts inside Libya after Ghadafi's government has all but normalized relations with the U.S. The Telegraph continued with: "The Libyan Combat Islamic Group (GICL) was expelled from Libya by Gadhafi in 1997 after it was implicated in attacks against government targets. At first the group relocated to Afghanistan, where it became closely involved in Osama bin Laden's al-Qaeda organization. After the war in Afghanistan in 2001 the Libyan group was given a safe haven in Iran, together with other North African terrorist groups linked to al-Qaeda. Now the Iranians have agreed to provide the Libyan dissidents with expert training to enable them to attack Libyan targets and intensify their campaign to overthrow Gadafi."

Making matters worse for Iran, especially after their recent blunder with regards to parliamentary elections, in which reformists were largely removed from the voting ballot by the hard line Islamic regime, last week, "Mohammed ElBaradei, the IAEA's director-general, reported that Iran had undertaken nuclear experiments that it failed to declare, raising fears that Teheran is still trying to build an atom bomb. Inspectors discovered undeclared nuclear material, including polonium, a radioactive element used to trigger a nuclear bomb, and traces of uranium enriched to a far greater degree than the Iranians had previously admitted."

"The Iranians have told Libya of the group's presence in Iran, but promised to restrict its activities to al-Qaeda operations elsewhere so long as Gaddafi does not reveal details of Iran's secret nuclear activity."

The article sheds important light into Ghadafi's recent capitulation on his anti–U.S. and U.K. stance, self preservation. "One of the reasons that Gadhafi sought to improve relations with British intelligence following September 11 was his concern about the growing effectiveness of Libya's Islamic terrorist groups. The improved relations culminated in Gaddafi's decision, announced at the end of last year, to dismantle his weapons of mass destruction."

It also, once again, sets up the potential for a set of damaging revelations, which could undo any kind of potential deal that the U.S. may have negotiated in Iraq, and which involves a Shiite majority, with some kind of undercover, Iranian backing. Iran has historically supported the Iraqi Shiites, and would prefer to have them in charge in Iraq, for what most describe as security reasons going back to Saddam's bloody war against Iran.

Iran, also threatening to tarnish its international image further, at a time when many are becoming increasingly distant from Venezuela's president Chavez, has also begun to negotiate business deals with Venezuela and is on the road to potential agreements with Brazil, another somewhat controversial South American country, whose actions have recently torpedoed a free trade pact between the region and the U.S. According to the official Iranian news agency IRNA, Iranian president Khatami, returned from the Group of 15 meeting in Caracas with a deal in which Venezuela will be buying farm equipment from Iran, including over 430 tractors.

According to the Telegraph: "Iran's government fears that it may become the next target in the war on terrorism if it cannot convince the IAEA that its nuclear development project is harmless. For now, the Libyan dissidents are being trained at a camp in southern Iran. If Tripoli makes any unauthorized disclosures about the Iranian program, however, they will be encouraged by Teheran to resume their violent campaign to overthrow Gadhafi."

Conclusion And Notable Subtleties

It is becoming quite clear, based on what usually are credible sources, that Mr. Bin Laden is about to enter a very difficult period in his life.

It is also plausible to conclude that Pakistan's nuclear supermarket was an important cog in what is an increasingly damaging situation for Iran.

And it is increasingly credible to assume that the U.S. smells blood and is going to move in for the kill.

Indeed, according to AP: ["It's going to be a full-court press,"] one Pentagon planner was quoted as saying. The article added that "some of the most highly skilled U.S. Special Forces units would be shifted from Iraq to Pakistan. Special Forces personnel have been briefed on their new assignments and in some cases have been given ["warning orders"] -- the stage before being sent into combat, according to a military adviser."

Thus, a daring notion begins to creep in to our analysis: a stronger case than most attest to, can be made for the notion that the U.S. might be winning the war on terrorism, or at least this important stage.

Where the subtleties referred to above, come in is this. Iran's government is divided into factions. The main two are the reformists, and the old Islamic clerics. The latter hold the power base at the current time. The former have been weakened.

Conventional wisdom dictates that the Islamic radicals, along with the Republican Guard, mentioned above, are involved in significant clandestine activities. And in this case, we see no reason to quarrel with this viewpoint. Little is known, however, about what it means to be an Iranian reformist.

Amongst the impressions of the conventional wisdom, according to wire and intelligence reports, issued over several months, are that Iran is involved in the harboring of Al-Qaeda members, in the support of terrorist groups, as we mention above, and now that Iran is involved in the reported assassination threat of Ghadafi.

What is obviously happening here, and is being ignored by the mainstream press, is that the Iranian-Pakistani alliance, based more than likely, at least partially on the traffic of nuclear technology, and more likely on the hatred of the United States, is beginning to unravel, or at least is on the run. In other words, Musharaff has switched sides.

Ghadaffi's about turn, Saddam's capture, and the steady and consistent revelations about Iran's nuclear program, are but the tip of the iceberg.

If indeed Musharraf and Bush have cut a deal, what we are seeing is that Iran is running for cover, with the radicals trying desperately to do anything that they can to stay in power. In fact, these developments, better than anything else provide ample reasons for the Iranian government's rigging of their recent election, as they fear for their political lives.

If Iran is indeed as fragile and frazzled as it seems to be, then by its own design, it is already divided, meaning that under the right circumstances, it may be ready to be conquered in some fashion, more likely figuratively than physically.

For Bush, it is a game of time. If he can unravel the entire axis, somehow weaken the Iranian hard line government, and open the Middle East oil spigots to Exxon Mobil and the rest of the U.S. oil pack, while at the same time increasing U.S. employment, he will have his election.

Tall order for the Bush team. Only time will tell whether they are up to it, and whether they can convey the message of what they're really up to, to the American people before November.

More important then, becomes the notion of whether the American public would care about any of this, given their preoccupation with the preservation of their lifestyle.

Venezuela On The Rocks Again

Finally, we note that the situation in Venezuela is deteriorating steadily, and that a close look, reveals that once again Iran is at least for now, peripherally involved.

While the major media spent time and effort on Haiti, demonstrations over the weekend rocked the Venezuelan capital of Caracas. Multiple sources reported huge anti Hugo Chavez demonstrations and marches in the streets. reported that 41 injuries and 1 death resulted from clashes between the demonstrators and riot police.

At the center of the dispute continues the on again off again referendum against leftist president Hugo Chavez. Millions of signatures have been turned in to officials, but are being disqualified, placing the referendum in danger of not occurring. As a result, the opposition is turning up the heat.

Chavez is increasingly emboldened, calling for investigations of the Caracas police, who may or may not be loyal to him. According to "At a Feb. 28 meeting in Caracas, the presidents of Argentina and Brazil counseled Venezuelan President Hugo Chavez to tone down his increasingly anti-U.S. rhetoric, Buenos Aires daily La Nacion reports, citing sources in the Argentinean delegation to the Group of 15 summit. After the three leaders met, Chavez gave an hour-long speech inaugurating the G-15 summit in which he reportedly railed against the United States and capitalism."

On an international level, Chavez seems to be increasingly isolated. According to the Miami "Argentine President Néstor Kirchner skipped the morning session of the G-15 summit in Caracas on Saturday, meeting instead with principal leaders of Venezuela's opposition."

The Herald added that "the encounter with President Hugo Chávez's opponents was the weekend's second blow for the embattled Venezuelan leader, who opened the summit Friday to mass protests that left two people dead and 26 injured. Chávez closed the two-day conference of 19 countries with just two heads of state at his side -- including the controversial leader of Zimbabwe. [''One of the only presidents who stayed in Venezuela for a few extra hours with his entire delegation spent it meeting with leaders of the opposition in search of a democratic solution here,''] said opposition congressman Julio Borges, who attended the meeting with Kirchner. [''It was a great gesture by Argentina and a lesson to the Venezuelan government that a foreign government is more tolerant than they are,''] Borges added.

"Kirchner was one six presidents attending the 12th meeting of the Group of 15, an organization actually made up of 19 developing nations. The presidents of Brazil and Colombia left Friday."

The bottom line here is that Chavez is slowly but surely wrapping the rope tighter around his own neck. When Brazil and Argentina, certainly not big fans of the Bush team, leave the conference early, and Argentina's president meets with the opposition before leaving Venezuela, these are not good signs.

And when the only country willing to do business with Chavez, at the end of a conference that he hosts, is Iran, the only conclusion is that the doors are rapidly closing for Venezuela, the fourth largest supplier of oil to the United States.

U.S. stocks could move higher in the next few days, as the seasonal tendency at the end of the month and the first five days of a new month makes itself felt. So far, though, despite last week's bounce, there has been little sign that the rally could last beyond such a short time.

The S & P 500 remained above its 20 and 50 day moving averages to end last week, closing above 1140. Resistance persists at the 1158 area, which is where SPX has run into trouble twice since December. The index tested its support at 1090-1126 successfully on 1-29, but has done little to the upside since. The 200 day moving average for the S & P 500 is near 1041, providing bull market level support. The market continues to trade within the 1138-1169 band.

The Nasdaq held above 2000, but remained in a down trend. The 20 and 50 day moving averages are providing stout resistance for the Composite. Long term support at the 200 day moving average at 1857. 2186-2256 is the next upside target, if the index can rise above 2100. The small stocks seemed to have picked up once again are starting to out perform.

Sentiment was steady on 2-26.

The CBOE Put/Call ratio checked in at 0.72 on 2-27-04. This remains a neutral number. We like to see investors turn bearish when the market starts looking toppy, and we also like to see them become cautious as markets rally. A consistent string of low readings can be a sign of excessive optimism and often signals a top in the markets. If the P/C ratio drops rapidly as the market rallies it is usually a signal that the rally is reaching its end or that there is weakness ahead. Readings below 0.5 are of concern, but not as serious as readings below 0.40. Readings above 1.0 are bullish. The numbers cited here are meant to be evaluated on a closing basis.

The CBOE P/C ratio for indexes fell to 1.40 on 2-27, after delivering a good strong reading of 1.95 on 2-25. In retrospect, if the market rally continues, it would seem as if the 1.95 reading above, and the 2.02 reading on 2-20 might have signaled that the down trend was coming to an end. The index signaled a possible market bottom at 2.03, on 2-4-04. Numbers of 1.6-2.0 are usually preludes to rallies. Readings below 0.9 suggest too much bullish sentiment, just as readings above 2 are usually required to mark major bottoms.

The VIX and VXN had readings of 14.55 and 22.67 on 2-27. These numbers drifted lower, but are still in a range. VIX has recently made several new 52 week low. When these indexes begin to rise, it is a sign of concern as rising volatility indexes suggest that an acceleration of the prevalent trend is on its way. In this case the implication is that the down trend is going to assert itself. This series correctly predicted that a trend change was on its way. If the volatility indexes begin to rise, it usually means that the market trend is about to change, usually to the down side. A fall near or below 20 on VIX and 30-40 on VXN is considered negative, a fact that is usually confirmed when the volatility indexes begin to rise. Readings above 40 and 50, respectively, are often signs that a bottom may be close to developing.

Newsletter writers were the most bullish in several months, for the week ending 2-27-04, a persistent negative for much of the bull market, thus far, which the market has ignored. At some point, this is likely to come to roost. The ratio of Bulls/ Bulls + Bears of Investor's Intelligence's weekly sentiment figures again remained above 75%, where it has been for several months now. We are always fearful of a market in which the majority of newsletter are extremely bullish for extended periods of time. Newsletter editors have been very wrong as a group since the top in the year 2000 and their rising and sustained enthusiasm as the market has rallied is another sign that the market is bound to fall significantly at some point in the near future.

The futures traders polled by Market Vane delivered a sell signal on 2-20, with a reading of 70% bulls on stocks. This indicator drifted back to 67% bulls, a still high number on 2-27.

Our Big Trend Model checked in at a neutral 50, a neutral number, for the week of 2-27-04. Readings above 70% often signal that market weakness could be lying ahead. Readings below 40% often precede market bounces. The Big Trend Model is composed of technical and monetary indicators and updates automatically on a weekly basis.

Our MASI indicator gave a sell signal on 2-27. The index gave a buy signal on 2-13, but did not follow up on 2-20. MAGI and MASI signals have not been particularly useful of late. This is not an unusual development on occasion, as these indicator tends to drift in and out of usefulness from time to time. When both indicators agree, there is a high degree of correlation with a significant market move. When these indicators disagree, it is often a sign that the market is about to go nowhere but that volatility is on the verge of increasing. MASI buy signals when MAGI is bearish are rarely worth acting on. MAGI is an intermediate term indicator with an excellent predictive record. The best market bottoms occur when both of these indicators are both on buy signals, a telling sign of intense fear on the part of investors. MASI and MAGI are sentiment indicators that are updated on a weekly basis.

The NYSE specialists and members were net buyers of stock on the week that ended on 2-14-04. This is the second consecutive week of buying after several weeks of selling, which coincided with the market's recent pull back. This is something to keep an eye on, since the big specialist houses had been net sellers of stocks during the bear market, and began loading up on stocks prior to Thanksgivings week, suggesting that a holiday rally was possible. The fact that specialists are buying when others are selling is usually a sign that at some point, perhaps in the near future, stocks could move higher, or at least stop falling. We would be concerned to see increasing levels of short selling by the specialists, which is still not evident. We will be watching this indicator carefully over the next few weeks, for that development. The most recent data still showed that bullish low levels of short selling on the part of this group continued. This indicator is very positive when short selling by the specialists is low as the same time that they are net buyers of stock. This is a set of very smart investors, and when they turn positive or negative, it is just a matter of time before the market follows. Spec data is released to the public with a two week lag, so is not useful as a market timing tool, but is excellent background and confirmatory information.

The Philadelphia Oil Service Index (OSX) remained in good shape to end the week. OSX finally closed above 107, and now has resistance at 110. A long term move, if this move gains momentum could take the OSX to 140. The index rallied smartly on 1-20, and has reached an important resistance level, but had remained flat. For more details on trading the energy sector visit our energy timing page, featuring our highly effective OIH timing model and our Top Ten Energy Stock List.

In the current market, we recommend a copy of Successful Energy Sector Investing. The book predicted many of the current developments in the economy and the energy markets, and provides an excellent set of benchmarks and trading lessons for what could be in store for the future.

The Amex Oil Index (XOI) closed the week on a break out, moving toward 600. This index is in a stealth bull run. For immediate analysis, including stock picks, and the latest in technical analysis of the entire energy complex, our subscriber section has a full complement of recommendations in oil service and the rest of the energy complex.