The price of crude has somewhat stabilized, but for how long is the
bigger issue. You can see in this daily chart of crude below, the
commodity continues to hug its 3X3 DMA (blue line) lower. However, we
would expect at some point at least a minor relief rally back above its
3X3 DMA before it does end up finding its way down around $37 per
barrel.
It’s not for certain oil could rally in the interim, but we are pretty certain we’ll end up seeing $37 per barrel when it’s all said and done. It’s more a matter of how it’s going to get there.
It will be at that point we’ll start to strongly consider some quality energy names, but not before then. Unless of course we get some sort of majorly definitive reversal back to the upside, or more importantly some sort of strong fundamental change, but even that’s a reach at this point.
As for this morning’s early strength, it’s pretty broad based with transportation and tech leading the charge on the day so far, but even that’s questionable because everything is pretty much moving higher except for healthcare and biotech, which appears to be taking a slight breather following last week’s impressive rally in both sectors.
There’s no question at this point the bulls are winning the short-term battle, so there’s no technical context at this point to be short the markets, or even test the markets strength on the day. As a matter of fact, if you faded against these markets at any point over the last several days, Friday’s trigger above 6,255 takes those trades off the table now.
Even emerging markets are strong on the day with foreign driven U.S. ETF’s tied to Brazil, Mexico and Taiwan also doing very well on the morning so far.
We’ll need follow through to the upside, that’s for sure. However, based on what we’re seeing so far on the morning, it looks like we’ll end the month of June on new highs across all of the major indices. This once again suggests the trend is our friend until proven otherwise.
The bottom line is the possibility of a market selloff doesn’t appear to be in the cards until the S&P 500 potentially finds its way to that key 2,500 level.
Until then, we’ll continue to look for more ideas to exploit in an effort to maximize profits, while minimizing any potential downside risk.
It’s not for certain oil could rally in the interim, but we are pretty certain we’ll end up seeing $37 per barrel when it’s all said and done. It’s more a matter of how it’s going to get there.
It will be at that point we’ll start to strongly consider some quality energy names, but not before then. Unless of course we get some sort of majorly definitive reversal back to the upside, or more importantly some sort of strong fundamental change, but even that’s a reach at this point.
As for this morning’s early strength, it’s pretty broad based with transportation and tech leading the charge on the day so far, but even that’s questionable because everything is pretty much moving higher except for healthcare and biotech, which appears to be taking a slight breather following last week’s impressive rally in both sectors.
There’s no question at this point the bulls are winning the short-term battle, so there’s no technical context at this point to be short the markets, or even test the markets strength on the day. As a matter of fact, if you faded against these markets at any point over the last several days, Friday’s trigger above 6,255 takes those trades off the table now.
Even emerging markets are strong on the day with foreign driven U.S. ETF’s tied to Brazil, Mexico and Taiwan also doing very well on the morning so far.
We’ll need follow through to the upside, that’s for sure. However, based on what we’re seeing so far on the morning, it looks like we’ll end the month of June on new highs across all of the major indices. This once again suggests the trend is our friend until proven otherwise.
The bottom line is the possibility of a market selloff doesn’t appear to be in the cards until the S&P 500 potentially finds its way to that key 2,500 level.
Until then, we’ll continue to look for more ideas to exploit in an effort to maximize profits, while minimizing any potential downside risk.
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