Oil appears to be in the fifth and final impulse of the sideways corrective phase. If this is true, we can expect a breakout soon, in either direction. Watch for a retracement back to 31 beforehand. The Kovach momentum indicators are relatively level, but oscillating about a mean, lending credibility to the sideways movement.
As noted yesterday, bonds are having trouble making higher highs. Both kovach momentum indicators have leveled off or retraced, and we have a red triangle at the high of that candle at 139’10’5, indicating a pullback is coming. Look for ZN to establish value in the highlighted region.
Stocks could really go either way. While the S&P 500 is looking “toppy” with a red triangle on the Kovach Reversals Indicator, the Kovach OBV (blue indicator) remains pretty bullish and there is a pullback in the Kovach Chande. Those of you who have studied these indicators knows that is a long signal.
We are in a relative vacuum zone, so it is likely to see a decisive move either way. If you have a long-side bias, 3055 is a good target. If you are a bear, check out 2991.