The action in the refiners reminds me of Ernest Hemingway's first novel, "The Sun Also Rises."
Last week, we had Lehman and Citigroup telling us to sell the refiners, or buy them back at lower prices at the end of the year. Today, Deutsche Bank, who two weeks back, said to sell TSO, changed their mind and raised the stock to a hold.
Makes you wonder at the prices these brokerage firms were trying to steer the stocks to. Putting sell recomendations at the bottom was either gross stupidity, or a blatant attempt to help somebody out that was short the stocks.
And the way the stocks bounced, it makes you think that it was a combination of both factors.
It's Wall Street's Pamplona, which is not much different then Hemingway's:
"He was telling me about the bulls coming in tonight...."
"What's it like?..."
"It's pretty good," I said. "They let the bulls out of the cages one at a time..."
"Do they ever gore the steers?..."
"Sure. Sometimes they go right after them and kill them."
"Can't the steers do anything?"
"No. They're trying to make friends."
"What do they have them in for?"
"To quiet down the bulls!"
Tomorrow, Sunoco (SUN 47.44) should get some action and then an upgrade. The stock has based in the mid 40's for all of May, and is down from a high of 86. Now it looks like it can go straight to 57. Just look at the corresponding move in Holly Corp (HOC 47.40) which was up 5 bucks today after sitting at 42.
The refiners now are the play in the oils, and since the analysts couldn't steer these numbers lowers, the bulls will run with them higher. Sunoco should have never traded down to 42, so it can quickly tack on 20 from it's low, and the first 10 points should come this week.
Look for SUN to gore the bears!