Oil And Light Volume Dominate The Market Action
As oil declines the major stock market indexes catch a bid and trade higher. Spot crude has now become just like the U.S. Dollar Index was. A weaker U.S. Dollar Index would help inflate the major stock market indexes. Now, since the crisis in the Middle East and North Africa it is the high oil prices that are stalling the stock market rally. The magic number that crude can reach is $100.00 a barrel before panic sets in on the stock market.
Spot crude seems to be consolidating just under the psychological $100.00 level.Should crude at some point rally or surge above that level it would be prudent to expect a declining stock market. Today, oil for April delivery ended the session on the NYMEX at $97.10 a barrel. Every trader and investor has one eye glued on an oil chart as the stock market continues to trade inverse to oil.
The small rally in the stock market today is rather unimpressive for a couple of reasons. The Dow Jones Industrial Average(DJIA) is leading all of the major indexes today trading higher by nearly 70.00 points. However, the S&P 500 Index is just trading higher by 3.50 points, and the NASDAQ Composite is trading lower by over 9.00 points on the session. Therefore, the DJIA is not really painting the entire picture of today's jittery market. The trading volume is also very light today and that will usually favor the upside for stocks. Should better volume resume tomorrow we shall get a better picture of the overall stock indexes.