Stocks Fight Back!

Everytime oil takes a hit, stocks make a one day run for it. But oil have rebounded every single time in the past few months, taking stocks lower. In fact, stocks take an immediate dive the day following such a surge in the past few months. Is today any different? So far, this surge seems totally dependant on the drop in oil price just like those few times in the past. However, there are still no indications that crude oil price is ready to reverse into a bear trend. In fact, it is once again riding on its strong rising trend line. Everytime it touches this trend line in the past few months, it actually rebounds higher. Could it be different this time round like I mentioned yesterday? Could oil go into a tight neutral trend from here onwards? Maybe, but it is still too early to tell. The Dow is still in a strong bear trend and today's surge does nothing to change the prevailing trend but a strong bullish momentum has begun building up as indicated by our momentum indicators. This was what we did not see in the past few surges. In fact, the rising bond yield curve (see bond yield curve) also suggest a pour back into the equity market from the credit market. So, a real possibility lies today that this time might be different but it is still too early to tell.