Order Of Magnitude

FinViz is an excellent visualization resource. Have a look at this heat map:

The financials are overwhelmed in green, while the resources are battling the red. The massive move to the upside today has all the chickens flapping around the coop. The recent decline in the price of oil has the market grabbing whatever price gains it can. Today was excellent, but have a look at oil on the weekly timeframe:

All the moving averages are still climbing over each other, and there is no doubt that this price is trending higher. Volume over the last three days' decreases has been higher than normal, which is a very good sign if you are looking for oil to stop its upward march, but it may be a head fake. If you stick to the high highs, higher lows school of trending, this pullback needs to go below the last local minimum. Looking at the chart, you could argue that the last real low is either $100, $90 or even $80. The difficulty in discerning a minimum makes it hard to believe anything to the downside is a good probability trade. This monster hasn't taken a breather in months.

Price holding below $105 might make it worth revisiting, although you'd be trying to play ranges in a sideways moving fund that is tied to a very explosive commodity. Right now, unless you have a crystal ball, you are safer on the sideline.

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