Crude Oil Prices Spread Fear Throughout Large Cap Stocks
Posted on May 21, 2008
Filed Under Market Speculator |
As the price of crude was nearing and setting all time highs stocks were took a beating. The selling wasn’t necessarily “PANIC SELLING” like we saw on August 16th, 2007 but, it was starting to near those levels. At the end of the trading session the NYSE indexes that include NYSE composite, Dow Jones Industrials, and the S&P 500 notched distribution days. We now have the Dow and S&P500 with 5 distribution days in the past 4 weeks. However, the leading index NASDAQ composite has only one day of distribution. Volume came in 10% lower on the NASDAQ as selling did not accelerate on the tech heavy index. We have to be mindful of the heavy selling over on the NYSE, but they aren’t the leaders in this market. If the NASDAQ were notching its 5th distribution day I’d be more worried.
This market is zeroed in on the price of Crude Oil. The Main Street media continues to pound the record high prices into the minds of its viewers. We are definitely in the parabolic move in crude oil. However, its too difficult to pin point when we’ll put in a top. It could be Wednesday, could be in June, July…who knows. The fact is Crude Oil did the same thing in the 70s and history again will repeat itself. At some point, new supply and new technology will lower the price of crude oil. Its plain and simple. We have enough “known” oil reserves in the US for our own consumption yet we do not drill it. If you want alternatives do not give tax breaks, give INCENTIVES to produce those new technologies!!!
Be sure to cut laggard stocks from your portfolio and stick with winners. Continue to watch for stocks breaking out of sound price patterns. Enjoy.
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