The 4 month rally has been broad based, with other risk-on assets like crude oil rallying in stride.
This isn’t a surprise, as crude oil will often perform in line when the economy is on track.
Currently, the correlation between stocks and crude oil remains up.
But if crude doesn’t get its act together, it may become a headwind for stocks. See the chart below for more color.
Last week, Crude Oil created a large bearish reversal pattern while testing its 61.8% fibonacci level at (1).
In my humble opinion, stocks would receive a short-term negative message if crude oil turns weak here. Stay tuned!
Crude Oil “weekly” Chart
Note that KimbleCharting is offering a 2 week Free trial to See It Market readers. Just send me an email to firstname.lastname@example.org for details to get set up.
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.