We've been doing this amazing Stressed Out Index and, in many ways, that's what came into play today. The stocks of the companies that are most stressed out aren't telling you the truth of the other side of the ledger -- the bond side, and it's pretty darned ugly.
Today gave you hope that oil can go high enough that maybe the most stressed out can make it. With some of these companies lowering levels where they can still breathe to the $30-$40 level, anything that says we have seen the lows for oil and we can go higher is a very big deal for the stressed-out oil and gas companies in the index. (Thanks to Rusty Braziel from RBN for doing great discounted cash flow analysis on the group. His Domino Effect is the book of the moment.)
Unfortunately, oil isn't the only thing that needs to go higher. Many of these companies are taking it on the chin from natural gas falling to 17-year lows. Both oil and natural gas have to rally for me to think that the stressors aren't going to be a problem.
Nonetheless, it is terrific for the market to see more than just Exxon (XOM) and Chevron (CVX) go higher.
Not only that, but the market seemed to ignore the hideous 25% decline in the stock of MPLX (MPLX), the pipeline unit put together by Marathon Petroleum (MRO) when the company said it will cut its distribution.
I think if oil had been down today, there would be a total bloodletting in that group. But it was spared the pin action.
I still don't think we can trust oil. They all feel like short-covering rallies. This one was no different.
Still, this was the first one where the rally took up the Stressed Out stocks. Check 'em out. These are at the heart of this market.
