Several indexes are rallying off key support levels after a modest 2 day downturn. The selloff in commodities, most obviously oil, is going to swamp whatever technical indicators have been pointing to a stock pullback. The Fed has already stopped raising rates and the drop in oil is further lessening the likelihood of rate hikes and makes rate cuts more likely. Hundreds of professional money managers have been saying "we're looking for a pullback and some consolidation here." As those managers begin to chase the rally they will provide a great deal of support. Retail investors will begin to succumb to the hype about a new high on the Dow and they will add money. Barring some disaster scenario like Iran bombing Israel, we should get even more highs from here.
I have to disagree on the fed cutting. With crude and most commodities 25% off highs there is no need for them to cut. Aint gonna happen unless there is a real shock to the system.
I'm not saying they ARE going to cut this year. I'm saying the market perception has made an important shift away from fear of tightening to entertaining the possibility of cuts. That's a huge shift in psychology and it's being hammered home by the selloff in oil.
Well not gonna rally like 1999, those days are gone forever. Technology is too advanced, institutions are smarter about filling orders and there are way too many retail sheep trying to be traders. But for buy & hold position & swing traders, this is gonna be great.
I'm unimpressed. As I type, SML is still a tad lower on the day (the Dow is up almost 60). The Russell hasn't taken out yesterdays highs which were lower than last weeks highs which were lower than the week before that's highs. In other words the small-midcaps along with tech are going NO WHERE. Only the blue chips and some other big cap names are participating in the rally. This isn't new money at work. That tells me the buying in SPX and DJI issues (and obviously there's short covering in ES)is purely rotational and defensive. That folks is NOT a bull item. As far as Deep Fried's points. Did we not rally for three years WITH crude trading higher? Did we not rally for three years WITH rate hikes?
i was about to say pabst they got 3 years up as oil went up 4 times and we had 17 hikes. are masters told us rate hikes and oil didn't matter. now that it falls they want there cake and eat it too. they want it both ways. all i can say is within the next 6 months a mega crash is happening to clean the system out