looked poised to break out on Monday, but could not clear the trendline. At least for now, oil bulls will have to wait and see if the market can gather enough momentum today to finally push through.
From a fundamental standpoint, there are plenty of reasons for oil to break out, but for some reason, it keeps getting stuck beneath resistance.
With the sudden reversal in oil prices, momentum across the broader market shifted as well, with the rallying by nearly 70 basis points in the final hour of trading, leaving the index down just 7 basis points on the day.
What is ironic is that the S&P 500 had actually fallen below its 10-day exponential moving average, but support in the index held, and ultimately, that is what matters. Whether the index can survive today is another question, with roughly $40 billion in Treasury bill settlements scheduled.
Certainly, the saw a significant gain on Monday, rising to 86. That is a pretty substantial move over just two days, climbing from 69 to 86.
That has helped the ratio of to bond market volatility contract somewhat, and based on the moves over the past two days, the oil market’s view may now be winning.
At this point, the has yet to capitulate, but then again, the equity market has AI, and apparently, you need oil for AI anyway. So…
