The Oil Rally Is Now Broken And So Is The Russell 2000 – Mike Swanson (05/24/2019)

Well, this has been a nasty week for the markets. Yes, the market is gapping up this morning, but it has been in a corrective wave since the start of this month and there is no real sign that it is over – and no reason to be a buyer of stocks until it is.

Up until now the market seemed to ignore the trade wars as robots and technical traders kept coming in to buy support as they are this morning with the S&P 500 above 2800, even if it now looks poised to break it before the month is over.

This current dip shouldn’t be shocking, because the market began this month in such an overbought condition that we knew that it was coming.

Yes there are stocks like Tesla that are now simply doomed as their fundamentals are so bad, but one thing that has happened with this market drop is we do seem to have a crash bottom in some commodities.

However, we cannot say that about the price of oil as it dumped for a 5% drop yesterday and has broken its price chart.

Oil broke its most recent low on big volume and with a big drop. The oil rally that began in December looks done.

Oil fell harder than the marked did last Fall too.

One thing though that is more troubling for the stock market is that the Russell 2000 is again acting weaker than the S&P 500, DOW, and Nasdaq are. It tends to do that when stock market corrections begin.

IWM – which is the ETF for the Russell 2000 – actually closed below its low of April and its 200-day moving average yesterday.

That’s nasty action, but TLT soared!

There is no need to be a hero today and buy into SPY or AAPL and the other popular stocks on CNBC on a gap up. If you want to buy those things just WAIT for this all to play out!

If you want to buy something then look into what actually has gone up this week and that’s mainly gold and bonds.

This is probably a good day for traders just to take the day off early and enjoy a long weekend!

That’s what I’m going to do!

And if you haven’t gotten my book Strategic Stock Trading now is the time to do it with my special giveaway offer.

In fact you should get the book now so we can drop it in the mail before 5PM today so that you won’t have to wait till Tuesday for us to mail it to you!

To grab it just go here:

http://wallstreetwindow.com/strategic-stock-trading-book-offer

-Mike



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