The equities rally you love (to hate) struggled somewhat upward today as high-rate beneficiaries spiked

Today the equities market struggled - up, down - attempting to continue the rally while consolidating the gains so far this week. On Twitter, MrTopStep tweeted their strategy to sell rallies (I retweeted it) - that worked 4 times in SPX and 6 times in RUT, if you could enjoy so much scalping! Meanwhile the action was in the oil pit - after a disappointing inventories report, oil pulled back but it must have been a wave 2-type pullback. Because oil reversed up again and spiked to new highs, suggesting it wants to tag the higher Fibonacci retrace on my $WTIC chart at about $91.50! Below is the USO chart, where it looks rather like a move up toward a theoretical channel line (and we'll know soon enough if it shapes as a large wedge). That chart is under KBE, the banking ETF, and above DAG, the agricultural commodities ETF. It too was up handsomely.

What's the theme? I'm think higher interest rates. Gold was well up too, but the euro and yen weren't, and the dollar dropped but not hugely. Our strategy of higher into mid-January seems to be working for these items, while interest rates also spiked. So it's getting tricky to play the move now, because at some point the perception of higher rates will put cold water onto equities, and maybe that's what will trigger the rally to top out and roll over into March. The goals remains SPX above 1140 and in the vicinity of 1150+.

What about the commodities including oil and grains? We do want to play an expected decline but it's looking too soon, eh?! Once a reversal shows up, we can start playing for declines (thinking DTO, AGA); the timing may be close to a turn for equities but not necessarily the same. Later, we'll expect a bigger play by buying the big dip around March - once again, the timing may differ somewhat across these asset classes. So meanwhile, if you're nimbly playing these, fine. And if you're just readying to position yourself, that's fine too! The next week or so will reveal more and it'll be much better to be prepared than caught off guard when the big turns come.