Monday -> The stocks ripped as crude bounces a $1.50 late against a strong broad market tape. A nuclear outage reversed natty but I am still a net seller. I have a pretty heavy hedge against natural gas here.

Energy stocks (OSX $264, E&P $495, XOI $1410, XNG $506) – Call it commodity rally going into a holiday week (oil +1.6%; nat gas +2.9%) or call it end of quarter window dressing (OSX +0.7%; XOI +1.0%; XNG +0.6%, E&P +0.8%; SPX -0.2%)…either way energy stocks were up Friday. July 4th likely creates quiet trading week, unless Q2 preannouncements happen. Still worthy of staying on toes.

Energy stocks (OSX $266, E&P $496, XOI $1389) – Inventory data turned oil price and energy stocks yesterday, but oil service was only energy outperformer (S&P 500 +1.3%, E&P +1.3%, majors +0.4%, OSX +1.9%). Fickle market. With green screen yesterday, maybe group set to rally as month/quarter close out and people window dress? Easiest call is fundamentals matter more than several weeks/months ago, so keep close eye on them (and Q2 earnings).

Pickering comments: Energy stocks (OSX $265, E&P $504, XOI $1406) – Not pleasant yesterday. Energy stocks were 1-3% lower, even when Dow was +120 points as gas prices took another hit (closing down 2.7% to under $7/mcf). First time in recent trading that bulls willing to relinquish reins to softish datapoint(s). Watching this closely as rally-to-date has shrugged off what we consider to be meaningful gas market overhang.

Broad market rolled in the afternoon on a delayed reaction to a Bear Sterns hedge fund liquidation. Energy started off weaker than the broad market on crude inventory build and strong gasoline yields (presumably) and then extended its losses another 100 bps in the last hour and a half of trading in sympathy with the broader market selloff.

Energy stocks (OSX $262, E&P $515, XOI$1398) – Had to have one of those type days at some point. Notably, first time in many weeks that energy stocks reacted to poor fundamental datapoint (oil inventory / oil price). Group sold off hard before broad market then took it lower (closing on lows, energy down 2.5-3%, S&P 500 -1.4%). Says perhaps market trading sentiment shifts more toward neutral from full speed ahead. Still plenty of dip buyers out there though.

Group mixed to sideways... Crude oil stronger than the stock, ex. refiners. Nat gas and nat gas levered names were weak. Gasoline holding at a pretty high level.

Strong as an ox today on double wammy -> crude followed through from the surprise non-build in gasoline today strongly...and the broad market followed through as well. Like it was all a bad dream. Stay tuned.