The New Year is off to a strong start.
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Stocks seem to be getting a push from both the New Year and the full moon. But historically, there’s a possibility that the New Year rally dies after just two days of buying. That is what the solunar model says is in store this year.
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Stocks had barely registered a net-line sell on the S&P 500 cash index right at Thursday’s close, and now they reversed and issued a net-line buy at today’s close. But that signal carries little weight, as it only implies another 8 points up to the 1140 target of the upper channel.
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But if stocks are going to move with gold and oil, then perhaps they do keep going here. Both gold and oil caught my eye today with their bullish accomplishments.
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Gold managed a second consecutive range-bust day (green and white). That’s a fairly strong acceleration to the upside. We saw the same type of signal on oil three weeks ago, and that market responded with a strong advance.
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Oil has finally broken above that downtrend line that we’ve been watching for some time now. The upper channel on the weekly oil chart is at 91.37. That’s a logical target for crude in this move in my opinion.