Stop me if you’ve heard this before- crude oil is crashing and taking stocks along for the ride. West Texas Intermediate sees key psychological support at $30.00, but as I’ve pointed out before, the big technical support point isn’t until $20.00. There’s no reason to go there other than there’s nothing left to stop it as buyers nor bulls are stepping in, and the brief geopolitical bounce this morning lasted an hour.
Equities
The Dow Jones Industrial Average was up almost 200 points, but it didn’t take long for that to evaporate. That’s been the script for a while, but Monday, there was a late spurt hinting that some buyers are willing to buy weakness. The question is when the masses will feel that urgency to step up. For the remainder of the session, watch for 16,240 as the critical support point while 16,600 is the area where resistance has become too great.
DJIA
The market has to be tested, and it’s not about the session that starts higher out the gate and goes straight. The test that must be passed is the session(s) where markets appear down for the count and widespread buying seems to come from left field.
Again, the question isn’t about value or opportunities but the current unknowns and downside bias. I think we could bounce into the close, but risks are such that we don’t have to force the issue. Buyers are emerging because there are lots of values in our midst.
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