Non-News from Doha Stokes Short-Covering Surge

by Rick Ackerman

DaBoyz trapped bears badly in off-hours trading early Monday, taking advantage of a stage-managed sell-off in crude to stoke fears of a stock-market rout at the opening bell. The opposite occurred, and it was deftly engineered. The trap was sprung following the very unsurprising news that cartel oil producers meeting in Doha, Qatar couldn’t agree on quotas. There followed a classic example of “short the rumor, buy the news”. When the dog-bites-man story from Qatar hit the tape, crude oil futures, already well oversold, reversed and began to ratchet higher. DaBoyz seized on this to goose index futures into a short squeeze that left bears bloodied and dazed by day’s end. Now, with the Dow and the S&P 500 just inches from new record highs, bears may have sealed their own fate. Their devastation could be compounded if GOOGL earnings due out after Thursday’s close are bullish, as the stock’s charts hint they will be.

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