May 28, 2008
We continue to make steady progress on the charts. But we need to see the indices (NASDAQ and S&P) break the highs established earlier this month. In one of our weekend articles we wrote about the prospect of oil’s bubble popping in the near-term. Well we’ve seen some selling in oil this week, but what we saw today, was oil pulling back, and the ever so aggressive bulls salivating to get back in on oil on short-term weakness. That is why we saw oil open the day down, and then steadily work its way back into positive territory. Mainstream news will have you believe that it’s because of the instability of oil supplies in Nigeria, but it was really the speculators that drove up prices back over $130/barrel mark. Any type of pullback was bound to see buying interest, as everyone wants to jump on the bandwagon and make a buck or two. However there is a lot of ‘dumb-money’ flowing into this commodity, and we are bound to see a failed rally attempt off of a pullback, and when that happens it’s all down from there.
Here’s the NASDAQ and S&P Charts…
