Price of oil dictating equities?

Oil price has been the catalyst for equity in terms of direction, IF oil is Down equities go down, IF oil is UP equities go UP. Oil prices have been dramatically UP in last 2 weeks, oil UP 9% last week alone.

Oil @ $48.52 and 52 wk high is $54.91, there is a good chance that oil may take out 52 wk highs in not too distant future.

Here is how equities are sitting vs their all time highs :

Dow closed @ 18552.57, all time high 18668.44

S&P 500 closed @ 2183.87, all time high 2193.81

Nasdaq closed @ 5238.38, all time high 5271.36

Here is a look @ RSI :

Dow 57.36

S&P 500 @ 59.40

Nasdaq @ 65.63

IF we look @ 1st table of all time highs, we are barely 2 day move to new all time high in all indices.

RSI in Dow & S&P 500 are @ attractive buy point, Nasdaq is the strongest and may carry into 70+ RSI, this could make all indices into a new all time highs.

This Friday, Janet Yellen speaks @ Jackson Hole and as usual, everyone will wait for her speech, this may entail uncertainty for Thursday trading, another buying opportunity.

Interest rate remains on hold until end of the year, despite hawkish commentary from many Fed officials, but Janet Yellen always puts those talk of higher rate into a "wait & see mode"

It is very important to follow strength in Nasdaq, Oil & Gold.....a rare combination of strength in a very uncertain environment.

Market always defies common wisdom and logic.

It is important to see the trend and follow it, overthinking has not helped anyone, one usually misses bulk of the UP move by following their own interpretations.

This is a strong market and needs to be treated like that.

Stay diversified in strong stocks / sectors.

Good luck with your own analysis and comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed