Strange feeling pessimistic yet thinking bullishness. The employment report was disappointingly weak, but available trucking trucking freight is blowing past all time records in spite of substantial capacity being added since the beginning of 2021. For example, at the end of last quarter, there were about 80,000 loads on a typical end-of-quarter push on a prominent electronic load board I have regular access to. On Friday, it exceeded 100,000 loads. Seasonally, load availability tends to peak in May or June, before the automakers shut down for annual retooling for the next model year. God help our supply chain if we get a major polar vortex this year, causing diesel gelling problems. Although with corn prices as high as they are, biodiesel blends should be less aggressive, so fuel gelling problems should be less than otherwise. The last major fuel gelling event resulted in a six month or so trucking freight backlog. Further, I understand there are bottlenecks in unloading container ships, suggesting it will be a long time before our supply chain unkinks itself. Even further still, vaccine mandates are not popular with truckers and many are near or even beyond traditional retirement age.
Thursday and Friday ranges were tight with lower volume, suggesting consolidation prior to a continuation move up. Still, I am not confident in my read of the DOM, probably as a result of my feeling of pessimism. This pessimism is based on disappointing performance of some key Dow stocks and uncertainty over our political leadership. If ES can sustain prices above last week’s close, I will likely feel more optimistic about the market’s short to medium term prospects.
