Stock market & Oil ......

There has been a strange co-relationship with oil price movement and stock market direction.

Oil @ $29.64 on Friday is much better than low of  $26.05, this is a move up of 13.78% from low.

Stock prices have also moved in the last 5 trading days.....

First we moved UP from 1810.10 to 1930.68 in 3 trading days, which was a move of 120.58 S&P 500 points or 6.66%....

On Thursday & Friday we gave up @ low of the day, 28.51 points or 1.48%.....

OECD has given its latest estimate of GDP growth, everything is revised lower, US @ 3% and Canada @ 1.5%......no recession @ all.

IF we look @ total picture worldwide, it is not a negative scenario @ all.

Gold is flying higher on renewed inflation which came in above target in USA....

Most traders were not sure of gold rising but now we know why it was going up as inflation is ticking up from wage growth to consumer items.

Inflation is good as companies are able to increase prices on their product & services.

What all of the above means for stock prices.....

I believe that we will slowly move higher from here....

Front line companies will move up faster than struggling companies.

It is important to be in strong stocks as there is lot of room for price appreciation.

Many strong stocks are selling near lower end of their old range, i expect them to be much higher and make new highs in a years time.

@ this stage of the market, it is important to have higher exposure when prices are low.

This week, market should move higher as oil may find support and move up from here.

Conviction & patience is key in a changing market condition, IF we are to move substantially higher as we go along, then you have lot of room to grow your portfolio and returns.

Good luck with your own homework and stock picks.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed