Think these markets are ready to roar now following yesterday’s sharp
move higher? Maybe. We’re not out of the woods yet. Sure, they do have
every right to find much higher levels now, but we’ve seen these markets
range bound now for the good part of two months. And, considering how
they’ve continued to behave for quite some time, we can’t simply assume
all that much just yet.
The bottom line is we must continue to maintain “an anything can happen” stance until proven otherwise. Nevertheless, yesterday’ rally was impressive indeed – one that was very broad based with financials, semis and transportation stocks leading the charge. The latter can probably be attributed to weakness in oil, something we’ll have a look at here today.
First, have a look at yesterday’s sharp rally, a move we pretty much were leaning toward with a modest degree of conviction. The lows were getting higher despite several single day attempts to tank these markets over the last several weeks. Now, we’re right back up against our all-time highs with yesterday’s close on the NASDAQ being a fresh new all-time closing high.
We do, however, have something brewing on the long-term chart of the NASDAQ that could end up being fairly definitive, a very long-term expansion level that sits just above 6,000 on this monthly chart below. Interestingly enough, it’s also roughly right around a key short-term expansion level as well.
Is it possible all of the major indices make new highs and then break down for a while? Yes, it’s entirely possible, because if we continue to get follow through on yesterday’s strength, it could end up breaking an awful lot of short sellers’ backs. Then, the markets could potentially rollover from there.
As for oil, this is really starting to become a bit of major story in and of itself. We’ve got literally every last financial talking head out there speculating about inventories, the future of energy – black or green – around the world, and all of the potential geopolitical issues that could end up effecting a commodity Wall Street has been speculating on forever.
While we’re going to leave all of the inventory questions up to those who “think” they know, we’re going to focus solely on the technicals – and there’s two things we’ll point out today with respect to oil, one extremely long-term and one extremely short-term.
Something not many ever talk about is what oil was doing just prior to one of the biggest crashes in market history, the crash of 2008. Provided below is a monthly chart of light crude dating back to well before 2008. See when that long-term rally first started in oil back in 1999? See the arrow we’ve pointed to here in 2008? That was August of 2008, just a few months before the markets imploded.
We bring that up because not many people talk about how significant oil is to the overall markets these days, especially on an extremely long-term basis. So, there’s plenty of reason to believe oil isn’t going to be a cause for concern for quite some time. Not now, not next year, and who knows maybe not even five years!
The bottom line is we must continue to maintain “an anything can happen” stance until proven otherwise. Nevertheless, yesterday’ rally was impressive indeed – one that was very broad based with financials, semis and transportation stocks leading the charge. The latter can probably be attributed to weakness in oil, something we’ll have a look at here today.
First, have a look at yesterday’s sharp rally, a move we pretty much were leaning toward with a modest degree of conviction. The lows were getting higher despite several single day attempts to tank these markets over the last several weeks. Now, we’re right back up against our all-time highs with yesterday’s close on the NASDAQ being a fresh new all-time closing high.
We do, however, have something brewing on the long-term chart of the NASDAQ that could end up being fairly definitive, a very long-term expansion level that sits just above 6,000 on this monthly chart below. Interestingly enough, it’s also roughly right around a key short-term expansion level as well.
Is it possible all of the major indices make new highs and then break down for a while? Yes, it’s entirely possible, because if we continue to get follow through on yesterday’s strength, it could end up breaking an awful lot of short sellers’ backs. Then, the markets could potentially rollover from there.
As for oil, this is really starting to become a bit of major story in and of itself. We’ve got literally every last financial talking head out there speculating about inventories, the future of energy – black or green – around the world, and all of the potential geopolitical issues that could end up effecting a commodity Wall Street has been speculating on forever.
While we’re going to leave all of the inventory questions up to those who “think” they know, we’re going to focus solely on the technicals – and there’s two things we’ll point out today with respect to oil, one extremely long-term and one extremely short-term.
Something not many ever talk about is what oil was doing just prior to one of the biggest crashes in market history, the crash of 2008. Provided below is a monthly chart of light crude dating back to well before 2008. See when that long-term rally first started in oil back in 1999? See the arrow we’ve pointed to here in 2008? That was August of 2008, just a few months before the markets imploded.
We bring that up because not many people talk about how significant oil is to the overall markets these days, especially on an extremely long-term basis. So, there’s plenty of reason to believe oil isn’t going to be a cause for concern for quite some time. Not now, not next year, and who knows maybe not even five years!
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