Market Overbought Looking For Higher Low
Last Friday the DOW traded down to 16016. The DOW was down 258 points and then snapped back and reversed at around 11:00 and closed up 200 points on the day. Since that day we have been up six consecutive days in a row, up more than 1100 points. The market is now extremely overbought. We went from an extreme oversold condition to an extreme overbought condition. I am looking for the market to make a higher low. I am 100% confident that with only 57 business days left in the year the low of 15379 will hold for the year. At one point the DOW was down 10% for the year and now is only down 4%. I would be looking to sell any stocks bought lower into this rally and then buy them back lower on a pullback. I do think we will get some pullbacks to make a higher low in the next 1-2 weeks in the 15800-16200 range. I may even have to bump this range up to the 16000-16500 range.
The big number on oil on the weekly charts is a close above the 48.15 level. Today oil closed at 49.50. There is a significant amount of support for oil in the 44.30-46.30 range. I am looking for oil to pullback, make a higher low, and then push upward. I think UWTI is a great stock to look at. It is a 12-13 dollar stock with high volume that moves tick for tick with oil.
Gold was up well over $10 today. Gold got up to 1158 and I had said I would be looking to sell any gold and gold stocks in the 1155-1175 range. The Federal Reserve is now looking to raise interest rates if inflation gets above 2%. I do not see them raising rates in 2015. I think gold will be in a range, if it pulls in 20-30 points I would be looking to buy and trade the range.