Given that we’ve just broken out of a confirmed reverse head and shoulder pattern we’ll probably overshoot to the upside as we climb the wall of worry.
If you look at the chart of USO below, it could be in a position to run into resistance at April’s high as there are plenty of negative divergences on that chart. Should oil pullback, that would…or should have a positive effect on the markets. It’s actually quite remarkable that the markets has been able to plough ahead with oil and gasoline so high. And then you have high end retailers like Tiffany’s (TIF) and Coach (COH) that are hitting new highs and you wonder where the consumers are getting all their discretionary income.
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