I find it interesting to note that when regulators decided to abolish the naked short selling rules two days ago on financials these stocks started to tear upwards while at the same time the price of oil began to crack.  Oil is falling once again today to below $130 per barrel.  

Coincidence?  I really wonder.

For all the talk of supply and demand driving energy prices ever upwards, I can’t help but think the last two days of action in the markets suggests otherwise.  Certainly, global demand has something to do with rising energy prices, but a 40% move since the beginning of the year?  To me, it sounds alot more like fund flows gone wild. 

CNBC had a few hedge fund and fund of fund managers on this morning and almost to a tee they were long energy and short financials.   Maybe when you can’t do the latter, you have to sell some of the former to cover your losses.  

Pile on the recognition of slowing emerging market fundamentals and you’ll get an unwinding of a trade that will literally knock your socks off.  

I don’t know about you, but I’m looking forward to sandals…