Surprisingly, USO rallied as well...on even bigger volume. Beautiful engulfing candle to go along with that as well...oil bulls were happy...
XLF didn't do quite as well but still maintained much of its gains for the day. big selloff midday should be caution to the bulls out there though. Volume was decent again...
And a new chart, the UUP. a dollar etf...very important to the markets since it is so important to the price of oil. The drop in the dollar was the direct cause to the push up in oil today. if this dollar continues to follows its trend, i would bet that oil will continue going higher...
Analysis: Today was very impressive. A bit shocking actually. With so many big up days followed by selloffs or quiet trading days, i really wasn't expecting this much strength out of the bulls. I really don't know what to make of it. Earlier it was said that if we get a huge move up in the SPX on good volume that i would turn bullish...but i also said that if USO gets a huge engulfing candle on good volume that i would turn bearish....so my hands are tied. I wound up just holding my short position and didn't buy anything either. I think that tomorrow, either SPX or USO has to give. One will fall and one will rise....so depending on that, i will be either a bull or a bear by the end of the day. Looking at the charts though, i do favor a fall tomorrow in the markets because of the strength in commodities today. It just makes more sense as Oil is sitting on support while SPX is coming up on strong resistance. Also, the market was strong but financials and big cap tech was only moderately strong. If i had to guess, i would say that today was a bit of short selling and window dressing, not particularly the addition of many new bulls in the market. But i am very flexible at this point and don't really care if i turn bullish or bearish tomorrow. I really wonder if the market can in fact rally even if oil does not fall. And i wonder how much longer the big cap tech can stay weak as SPX rallies...notice that i took the big cap tech off the buy list today. They have been mediocre in their performance at best...weak relative strength
Game Plan: As V and DIS both beat the street today afterhours, we are more than able to open higher tomorrow. But with oil still strong and looking good with the dollar at good resistance, i would not be surprised to see a big down day tomorrow. If we get a big drop in oil back near 100 and SPX gives me a close higher than today on decent volume, i will be atleast 80% bullish by the close. But if oil pushes up higher to close at a nice bullish candle on good volume and SPX makes a lower close more than 50% retracement of today's candle, i will be 80% bearish. At the moment, i am 50/50....i don't like feeling this unbiased...especially since i do have money in the market.
Conviction Buy List:
Agriculture (agu, sqm, agu, ag)
Strong Financials (mer, wb, bac)
Energy (pbr, apv, hes, nov, xle)
Relatively Strong Tech (intc, dell)
USO
Conviction Sell List:
Weak Financials (leh, ibn, aig)
Retail (hd, low, nile)
Exchanges (cme, ndaq, ice, nyx)
UNH
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