Better But!

In our weekend report, we simply felt several things were starting to occur that needed to be watched.

We thought a good low was put in the market off of three straight reversal days to the upside right at vital support.

We thought oils were trying to turn the corner to the upside.

We thought China looked like it was doing the same.

Frankly, this was the first time in a long while that we were able to mention China and oils in a potentially bullish fashion. All have come to fruition, at least in the short run. This has simply occurred because things have worsened economically. Say what! Yes… Off of the weak employment number, the bet is now no rate hike. With no rate hike comes a lower dollar. With a lower dollar comes higher commodity prices   Thus the move in oil. As far as China, a rally was way overdue after such a drop and after the massive government intervention that continues today.  The lower dollar also gives rise to multinationals here thus the move in the Dow to the upside.

So we continue with our stance that a good low is in. We do not believe the August lows get taken out any time soon but keep in mind, with higher oil prices will come issues with areas that benefitted by the lower oil.  There are still plenty of areas that act terrible here namely the biotechs and other healthcare.