By Chip Hanlon

So, if oil's $10+ rally was the reason for Friday's 400-point stock market sell-off, where has the Dow bounce been the last couple of days? Oil has given back most of Friday's run this week, but stocks have regained less than 100 points over the same time. Worrisome.

It's just not good action. Combine that with the noticeable lack of pessimism today and investors should now be hoping--rather than assuming--that the January-March lows hold. This isn't a prediction of financial Armageddon, it's just a weak, weak tape... more downside from here seems very likely.

Oil and Corn

On a separate note, crude's action the last couple of days should be a caution to short-term traders. Oil's move Friday was a reaction to political events, the comments from Israel's defense minister that attacking Iran was unavoidable. Those who were short oil that day got a reminder of how geo-political events can make crude rally, while those who bought that spike saw how quickly news-related spikes disappear if the rumored news goes away.

Similarly, today's corn futures traders should be thinking about how much weather is priced into corn. It hasn't spiked dramatically, but some of the movement in corn the last few days is based on the extremely wet weather in the Midwest, so some food for thought, corn traders:

As we here at Delta Global have discussed agriculture over the last couple of years, often relating to the global agriculture portfolio on which we advise, we have pointed out that one of the most bullish aspects of the rise in ag prices was the fact that they weren't driven by weather; price increases have been relentless, driven by the demand side story investors are now familiar with rather than the typical boom-bust movements associated with extreme weather, price spikes due to crop failures, then crashes as normal weather returns.

Just be careful, short-term corn traders. Maybe things aren't too frothy yet, but if we get big price spikes in coming days based on weather, fight the urge to chase such rallies because weather-related spikes can vanish quickly.