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Previous Oil Rally Was Just Nonsense
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February 18, 2016

The large short squeeze in oil prices was based on the fiction from Saudi Arabia and Russia that prices should rise as price levels would be frozen.

That combined with Iran’s transparent support meant production would still increase.

The entire episode was a phony rally only leading to a squeeze. That allowed prices to rise for stocks overall for a three day WTF global stock market rally.

Nevertheless, the rally put stocks into the mid-range rally limits we thought were possible at S&P 500 Index 1902 to 1956, the same levels we forecast, and markets approached, back on January 29th.

Markets were short-term overbought prior to Thursday as the trusty McClellan Oscillator ($NYMO) displayed Wednesday. So we had the logical reaction down Thursday.

Economic data Thursday wasn’t inspiring as Jobless Claims fell to 262K as many have exhausted their benefits; the Philly Fed Mfg Survey fell for the 6th month in a row to only -2.6; and, Leading Indicators were flat at a weak -0.2%.

Apple shares fell sharply as the company reported its first (gasp!) decline in iPhone sales. I only display this given the high weighting the stock has on many indexes.

Market sectors moving higher included: Gold (GLD), Gold Stocks (GDX), Silver (SLV), Treasury Bonds (TLT), Utilities (XLU) and few others.

Market sectors moving lower included: Just about everything else.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

2-18-2016 2-57-05 PM

Volume was extremely light Thursday and breadth per the WSJ was mixed to negative.

2-18-2016 2-57-37 PM Diary

12-17-2015 9-04-44 PM Chart of the Day

 

 

 

2-18-2016 2-58-12 PM GLD

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • NYMO DAILY

    NYMO  DAILY

    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

  • NYSI DAILY

    NYSI DAILY

    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.


     

  • VIX WEEKLY

    VIX WEEKLY

    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation has changed due to a variety of new factors including HFTs, new VIX linked ETPs and a multitude of new products to leverage trading and change or obscure prior VIX relevance.


     

We should wait and see how the week will end.

Let’s see what happens. 

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Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.

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ETF Digest was awarded one of the most informative ETF websites in the10th Annual Global ETF Awards.



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Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com

 

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