Crude goes from driving stocks lower to pushing them higher this week. The sustainability issue is the question as this plays out. A weaker dollar has added to the rally in oil prices as well. Plenty to speculate on short term… Take it one day at a time and let this unfold.
Sectors to Watch:
The bounce on crude is in play short term. Sustainability of the trade is the question. We get supply data late morning and it will have an impact relative to confirmation of the speculation driving oil prices. This is the driving news on the week thus far and what will determine the micro term direction. Still in the range and patience is the key to finding the leadership… up or down.
SPY $204.50 was next resistance and looking for move and follow through today.
QQQ $103.30 is the resistance to clear today if we are going higher. Watching for follow through.
XLE $80.50 is resistance to take out and move higher.
Result for the Daily EGG Scan:
UGAZ, USO, EURL and TNA were the leaders on Tuesday. Crude bounce is worth watching for overall impact to markets. Volatility has dropped as investors feel some clarity on oil prices. That can be a mirage in the desert, but it is the driver currently. Small and Midcaps are in charge of leadership and if they can gain momentum it may be a determining factor going forward. Still need to be patient as the range plays out short term.