Yesterday, Federal Reserve Chairman Ben Bernanke announced the potential for a third round of quantitative easing only IF economic conditions continue to decline in the United States. He predicted that “inflation will subside as the effects of past energy and other commodity price increases dissipate”.

The Obama administration decided shortly after Bernanke's press conference that they were not willing to wait for an official third round of easing (QE3). So, in a press release this morning  the International Energy Agency (IEA) announced it would release 60 million barrels of oil from global reserves. Over half of the oil released would come from the U.S. Strategic Petroleum Reserve.

The Strategic Petroleum Reserve is located in a man-made underground salt domes in Louisiana and Texas. The U.S. holds 727 million barrels of oil in the reserves which is enough to cover 85 days worth of U.S. oil imports. The U.S. would release the equivalent of 5 percent of its reserves to the market.

The decision sparked controversy between the Republicans and Democrats. Republicans called the Obama administration’s plan to release the oil a political move, while Democrats said the effort to ease shortages may be too little, too late.

On a global scale, this is the third time that the IEA has released strategic oil reserves. The last time was shortly after the Hurricane Katrina.

Crude oil prices and shares of oil companies plunged after the news was reported. Brent crude oil fell more than $6 to $107 per barrel of oil. Shares of Exxon (NYSE: XOM) and Chevron (NYSE: CVX) were all down 3 percent in mid-morning trading. The Dow was down 200 points, but has pared some of its losses since the announcement.

The timing of the IEA move comes only days ahead of the end of the Federal Reserve’s second quantitative easing program (QE2). In the absence of continued Fed buying of Treasuries, and the liquidity it adds to the financial markets, moving to reduce oil prices will be another helping hand to the U.S. economy. Knocking $20 a barrel off oil prices would reduce America’s annual oil spend by some $150 billion.

At 6:00 am this morning I read in the Wall Street Journal that Gazprom's 2010 net income surged by 24 percent in 2010.

This increase didn't come as much of a surprise to me since I've been following the 'Russian Giant' for a while. But for those of you who aren't aware of Gazprom, this headline should make you sit up and think.

That’s because Gazprom is the world's largest supplier of natural gas. Not one of the largest - it is the single biggest natural gas entity on the entire planet. And in 2010 its net profit, not revenues, totaled more than $35 billion.

Investors have done an impressive job of shaking off a litany of negative storylines and jumping back on the bullish trend to higher stock prices. But let's not lose sight of the fact that S&P 500 bounced right where it should have, at 1,250. Today, it is challenging the next resistance/support level, at 1301.

 

The Apple Complex of tech stocks, which I referred to as a measure of investor sentiment, is also rallying. As TradeMaster Daily Stock Alerts' Jason Cimpl told his members this morning:

 

Yesterday's swift turnaround is a constant reminder that buyers still dominate the long term trend. The bulls have been stopped by 1301 resistance this week, but if they take it back, I'm looking for 1335 and then it's off to fresh highs. Today could be a gap and crap scenario, but the bulls have proven their ability to fend off negative ambiance and move the indices higher.

So when I say that you should make a list of stocks to buy, I’m not saying you should jump into the market and buy them just because they’re down a few points. I’m saying you should name your price, have the capital ready, and jump on the opportunity IF it comes.

And if this correction is even half as big as I expect it to be, just about every boat will get sunk as the tide recedes.

Even big, blue chip stocks that every investor should own will get hammered.

Last year, Exxon-Mobil (NYSE: XOM) shares sold for less than $60 – even cheaper than they were during the depths of the 2008-2009 bear market – briefly selling for less than 10 times earnings.

That’s the kind of company that should be on your shopping list at that kind of price.