Demand from China for energy was ratcheting up, right? Higher prices wouldn’t affect that, right? Well…

From Yahoo Finance:

• Oil prices fell below $114 on Monday for the first time since early May as the dollar extended its rebound and more signs emerged that China’s energy demand could be leveling off.
• “Now we’re focused on the weak demand side of the equation,” said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. “There was this thought process that the high price of energy didn’t matter to China and other countries — but we’re finding that that’s not the case.”
• “The market’s still kind of reeling,” said Darin Newsom, senior analyst at DTN in Omaha, Neb. He said more signs of economic slowdown could take prices back below $100 a barrel — a level not seen since early April.

A level not seen since early April… That is how things are. We think energy prices are crashing, but they’re at levels that only a few months ago were considered excessive. It’s funny how perceptions and memory can deceive, the energy crisis is not over by a long shot. And demand will pick up again, no doubt..

• Peter Beutel, president of the energy risk management firm Cameron Hanover, wrote in a research note that investors appear to be selling commodities to get back into stocks, which traded higher by midday trading Monday. On Friday, the Dow Jones industrial average surged more than 300 points.
• Beutel noted in his Monday note that crude oil open interest — or the number of futures contracts that are not closed or delivered on a given day — has sunk by more than 100,000 contracts since the record high in mid-July, a sign of heavy liquidation.

It looks like Jim Cramer was onto something when he called a bottom in the market a week ago, at least for now. But these kind of things can change overnight. It’s how the market is played. Get a dominant theme and some leveraged buying or selling volume confirming it, milk it, sell out at the top, change the theme, wrinse and start over again.. Who knows, Jim might even be the conductor.