We need the energy stocks to participate if this rally is going to be sustainable. The break down of XOM today on expanding volume was not very encouraging. This on a day when oil closed up too. CVX and COP also closed down on expanding volume. I think the best the market is going to be able to do is trade sideways if energy stocks can't rally.
That's exactly what has happened over the last couple of weeks. Keep in mind that XOM and CVX are the number 2 and 3 weighted stocks in the Dow. If they fail here it is going to be a drag on the industrials.
I still think the intermediate term rally is intact as long as my line in the sand at 865 isn't crossed.
Market Direction Change
2 weeks ago