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Keys: Markets Recover After Massive Sell



April 07, 2011 – Comments (0) | RELATED TICKERS: USO

After a late morning massive sell off, the markets have recovered, inching back to the flat line. Earlier, another massive earthquake struck Japan measuring 7.2. The markets freaked out on fears of more economic hardships, a possible tsunami and of course more nuclear meltdowns. However, it looks as if the impact may be on the minor side and the markets are responding by moving back to the flat line.

Oil is trading higher again today and looks to be headed towards $110.00 per barrel. The United States Oil Fund LP (NYSE:USO) is trading at $43.67, +0.30 (+0.69%). Not only has an economic recovery taken place, but fear over nuclear energy has put more emphasis on oil as the main source of energy. The uncertainty in the Middle East continues and is also adding fuel to the fire.

Solar shares are weak again today which is somewhat unusual on the back of higher oil prices. Usually, the higher oil goes, the more people will look to alternate energy. That is not happening today nor has it happened over the last week. This is structural weakness that must be watched closely. Often times when weakness like this is seen in a sector that should be strong, news will break about a miss in earnings or margin pressure. Keep a close eye on this sector over the next couple weeks.  First Solar, Inc. (NASDAQ:FSLR) is trading at $147.39, -3.21 (-2.13%).

The fertilizer stocks are slightly weaker again today. Yesterday, Monsanto Company (NYSE:MON) fell sharply on earnings taking the sector with it. Today, it appears some weakness remains.

Gareth Soloway

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