Few days ago I’ve posted my little theory that the Feds are conducting the harsh and unusual drain of funds to protect the important psychological barrier of $100 for a barrel oil.

The drain killed the Christmas rally and brought the markets on the verge of the technical breakdown. Today Feds did one final drain and the market, in its eternal stupidity, finally got the massage by sharply dropping the oil below $95.

Now the Feds may finally relax and I expect the increase of funds tomorrow. Then we’ll have the Jan 14 Taffy broo-ha-ha and I think the markets can go up for at least two weeks, because when lunatics get money they buy stocks, recession be damned.

By the end of the month the weight of negative earning surprises will finally take over the market and the rally will be over, but for now the party is on!

And because the recession will be already evident by February – believe me or not – I think that last week we saw the $100 oil for the last time for the next 5 years. Down she goes from now 🙂

Update: What I gave you was an optimistic scenario based on my believe into Fed consciousness. Darth Toll gave a very ominous scenario down in the comments. I hope he’s wrong but my hope is thin