Consolidation Day and Oil Is Behaving


We are now about 75 points off the Feb. 11 lows. Its felt like 500 points to me, and maybe you, because I laid in some shorts last week.  Most of that short term pain is over now though.  This wont be a “buy everything here because its up” post, but I will say that regardless of how long this rally lasts, there are some sectors that are basing nicely.

I still maintain that sectors like gold and utilities should be lower if risk is in fact back on, and I would have liked to have seen better action in the FANG stocks today. They did have a big day yesterday so I wont obsess on that, but no real follow through today.

Yesterday’s volume was on the super light side, but no one ever gave back a profit because they made it on light volume.  Breadth also weakened.  This is a really tough tape to figure right now, but bulls are clearly in control.

The one very bullish event that happened today was oil. We saw a 10.2 billion barrel inventory build, normally bearish, and although oil went down initially, it managed a green close. Nat gas on the other hand hit 17 year lows today.

Believe it or not, right now energy stocks are showing some of the best bases out there and I think I will be doing some homework there. I told you I liked KMI on the Sunday video and I may add it soon as a long. Although I was bearish on DVN a couple of weeks ago, it may have bottomed today and reversed.




Work to do, still tough to trust.

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