We're Watching Oil And Transports
Chris Vermeulen | Apr 03, 2019 02:44PM ET
Our research continues to support a bullish price bias over the next 30+ days, very likely reaching to new highs again before June/July 2019. For many months, others have continued to predict “doom and gloom” with warnings of treasury-yield inversions, global collapse events and other crisis occurrences. Yes, we believe continued price rotation will drive future price swings and they could be volatile moves – yet we believe any crisis will actually become an incredible opportunity for long traders to BUY into the markets at extreme lows.
Recently, our researchers focused on oil and the transportation index as key elements suggesting this upside move is far from over. Oil has moved from below $55 ppb to well above $60 ppb. We believe this move will continue higher to target the $64 level were resistance is likely to be found. We do believe that some price rotation in oil is likely to happen in the summer months – when travel increases and summer blend gas hits the markets. Winter has been uniquely difficult this year and the rise in oil prices, where OPEC and foreign-market events have attempted to push prices above $50 ppb is warranted, given global economic activities.
While oil continues to climb, the NASDAQ Transportation Index is also rallying above recent resistance near $10,500 and pushing higher, targeting the $11,250 level. This is important because the Transportation Index typically leads the US economy by about 3-6 months and is a key indicator of future expectations for the US and global economy. Any push above $11,000 in the Transportation Index would likely mean we are going to try to reach all-time highs near $11,634. A move like that would likely push the US stock indexes well above recent highs as well.
Much of our recent analysis has been focused on the opportunity that exists over the next 30-60 days in the US Stock Market. For well over 12 months, we've been suggesting that a capital shift is taking place and that the US stock market and US dollar are uniquely positioned to become safe-haven investments for foreign investors. We believe this process is still happening and we think the US market could continue to push up to new highs before another rotational move sets up. Our latest research suggests a peak may form near June/July 2019 – and that should concern traders. Until then, we think the upside price bias will continue and we still believe new highs are about to be reached.
As of today, we have technical confirmation that a renewed upside price move is happening and we continue to watch the precious metals for any signs of a base/momentum bottom.
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