As long as oil remains weak the stock market is going to struggle, as energy companies make up a big percentage of the S&P.
We have a couple of scenarios playing out at the moment. The first one is the test of the T1 pattern consolidation zone. Once the test is complete oil should move back up to new highs.
I'm a bit leary that this is how it's going to play out as there is no fundamental base for oil moving up with the global economy sinking deeper into the depression.
I think what we might be seeing is the left shoulder of a multi year bottoming process that should complete in late 2010 with a slightly higher low. From that point I'm guessing the deflationary forces will have run their course and we will enter the inflationary or more likely hyperinflationary end game.