The Week Ahead: Can Crude Oil Now Rescue Stocks? |
|
January 24, 2016 |
January 2016 Bond Updates
|
The combination of plunging crude oil and fears over the Chinese economy has gotten the blame for the stock market's slide in 2016. The market decline has been the cruelest to the small cap stocks which have led the market lower.
At least on a short term basis the action last Wednesday was significant. As I noted in Thursday's morning article "with the Dow down another 500 points mid-session Wednesday stock holders are clearly past the white-knuckle stage. With just 116 stocks advancing and 3077 declining mid-day Wednesday the selling had clearly reached panic levels".
WA1-22a
The action in the iShares Russell 2000 (IWM) was especially interesting. At the Wednesday's low of $95.06 it had dropped 17.6% from the high on December 30th. It did manage to close 4.6% above the day's low and back above the long term uptrend that goes back to the 2009 and 2011 lows.
With the continued strength on Friday IWM looks ready closed the week well back above $101. The next major resistance is in the $104-$105 area where the rally may end or could stall. What can push stocks even higher?
|
|
View more at: http://www.forbes.com/sites/tomaspray/2016/01/23/the-week-ahead-can-crude-oil-now-rescue-stocks/
|