Oil Pulls Back, Dow Gains...

FUNDAMENTAL ANALYSIS
The negative correlation between the price of a barrel of crude oil and the stock market played out today again as the Dow gained 130.43 points today, erasing the losses of yesterday. The question that needs to be asked here is whether or not this is the start of a significant correction in crude oil prices? I don't yet think so on both the fundamental and technical front. On the fundamental front, oil demand is expected to increase going into the summer months while crude oil production is going to remain stagnant as OPEC postpones their meeting to September. This alone is a strong short term support for oil prices. On the technical front, crude oil price is still rising along a strong rising trend line with no indications of breaking the pattern yet. Will oil price ever come down? CERTAINLY! In fact, when it does, it will collaspe with such surprise that will throw OPEC and oil traders completely off guard. This is because higher prices is just going to force consumers and nations away from oil and into alternate energy in every area they can. Such a shift in the demand curve would force prices down. Plus, the more human beings research into a certain area, the more progress human beings make in that area. Human has committed way too little time into alternate energy development due to the relatively low oil prices of the past decade. This surge in oil prices may really be the catalyst mankind needs to make a significant progress in the area of alternate energy and to come up with a lasting, green, renewable and widely available source of energy.

TECHNICAL ANALYSIS
The Dow certainly made an EXTREMELY important rebound today!
As I mentioned yesterday, the daily 30MA of the Dow served as a strong support level which could help battle against failing at the weekly 30MA. The rebound right off the daily 30MA today confirmed yet again that the short term bullishness is still holding up and not only diminishes the possibility of failing at the weekly 30MA, ending the intermediate bull run, but also opens up the possibility of a challenge of the 13000 resistance zone once again for a significant break and continuation of the intermediate bull run. I remain optimistic and will load up on more call options tomorrow if the Dow holds up.


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