"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 14 hours Why Are Investors Overlooking Gold Stocks?
  • 15 hours The App That Democratized Trading Is Now Worth $5B
  • 16 hours Super-Cycles: Why Gold Is Set For A Breakout
  • 17 hours U.S. Sanctions Russia For Election Meddling And Cyberattacks
  • 18 hours Snap Shares Tank Over ‘Slap Rihanna’ Campaign
  • 19 hours How Low Can Bitcoin Go?
  • 20 hours Amazon’s Japan HQ Raided In Anti-Monopoly Push
  • 22 hours Is Barrick Gold Close To Finding A Bottom?
  • 2 days Morgan Stanley’s Top 10 Short-Term Stock Picks
  • 2 days China: The Land Of The Ultra-Rich
  • 2 days Alibaba Soars On Reports Of China Listing
  • 2 days What Killed Toys ‘R’ Us?
  • 2 days SEC And IRS Take An Aggressive Stance On Cryptocurrencies
  • 2 days Bears And Bulls Face Off In Gold Markets
  • 2 days Bitcoin Is Winning Over The Housing Market
  • 2 days Markets Slide Sideways As Trade War Fears Linger
  • 3 days Why Aren’t Millennials Investing?
  • 3 days Bitcoin And Banking: The Next Mobile Payment Revolution
  • 3 days SEC Cracks Down On Silicon Valley’s “Disruptive Tech”
  • 3 days Wyoming Eliminates All Taxation On Gold And Silver
Why Is U.S. Wage Growth Slowing?

Why Is U.S. Wage Growth Slowing?

Markets rallied on news showing…

Sol Palha

Sol Palha

Sol Palha is a market analyst and educator who uses Mass Psychology, Technical Analysis and Esoteric Cycles to keep you on the right side of…

More Info

Crude Oil Bottom Likely to Propel Dow Industrials Higher

"The minute you settle for less than you deserve, you get even less than you settled for." ~ Maureen Dowd

The chart below clearly illustrates that a relationship exists between crude oil and the Dow. For most of the 1st half of 2015, oil traded sideways, and the Dow followed suit. Then, around July of 2015, oil broke down, and the Dow followed in its footsteps. We see a similar pattern from Nov-Dec 2015; oil headed lower, and the Dow once again followed in its footsteps; so much for the argument that states lower oil prices are conducive for the markets.

Dow Industrials and Oil Daily Charts

Fast forward to Jan-Feb 2016 and you notice that the Dow followed crude oil to a "T". The only difference being that while crude oil dropped to a new Low in Feb, the Dow put in a higher low. After trading above $51.00, oil consolidated and many a naysayer would have you believe that the oil rally is over. They will soon be proven wrong once again, but that is a story for another day.   Given the strong run up the pull back that oil experienced was minor in nature, and crude oil has put in a bottom. From low to high, crude oil almost tacked on 100% in gains.

We were expecting it to pull back to the 40.00 ranges with a possible overshoot to the $39.00 ranges; it traded as low as $39.19 before reversing course.  As far as we are concerned, the oil correction is over, and it is getting ready to trend higher. Moreover, it appears that the Dow is once again following in its footsteps as illustrated in the above chart. In this instance, the Dow bottomed early than oil. After dropping down to the 18,300 ranges, the Dow reversed course and soared to new highs. Potentially it could still test the 17,800 ranges; former resistance turned into support, before attempting to trade past 19,000.


The consolidation in oil appears to be over and given their relationship, the Dow together with Crude oil could be gearing up to trade to new highs.  Ideally, (but it is not necessary) the Dow would test the 17,800-18,000 ranges before making a break for 19,000. Thus all sharp pullbacks should be viewed as buying opportunities

"The art of acceptance is the art of making someone who has just done you a small favor wish that he might have done you a greater one." ~ Russell Lynes


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter