We pointed last week to the $103-$104 area as a breakout range for Nymex crude. Well, as you can see it broke through that, holding around the $105 level this morning. Having broken through that resistance wall, it appears to be headed higher.
The key level still appears to be this $103 range. It fell into that area earlier, then bounced back, and as of this writing it appears to be testing the level again (looks like two tests of it so far today.) If support there holds, Newswires’ Stephen Cox wrote this morning, crude will be headed for about the $107/barrel level, and ultimately to $127.
Don’t even wonder what that’ll do to gas prices. You’ll have more reporters than customers at the truck stops on the New Jersey Turnpike.
At the same time, the level to watch for on the DJIA is 12000, which represents roughly the uptrend line drawn back to the August lows, as noted by Dennis Gartman, who edits and publishes The Gartman Letter. Gartman wrote that the Nasdaq Comp may have already broken its uptrend line, and if the Dow closes under 12000, it’ll be headed for 11400.
Right now, stocks are surging, with the Dow up 70. They’re fighting. We’ll see where that goes; markets are very, very volatile these days.
I used to think all this technical analysis stuff was goofy, that there’s no way to boil a market run by human beings to a bunch of numbers. But I got to tell you, I’ve watched more than my share of these numbers get hit, and the market lurches up or down in reaction. In a world where most of the markets are controlled by computers, and those computers have these numbers programmed into them, it makes sense to pay attention.