Oil's moving up as indicated by USO intraday (chart at right) which is above its 50-day moving average again. Gasoline already pulled to a similar level yesterday so might be pulling oil along in some way. But notice also that the dollar is tanking today, while gold has spiked up to tickle once again that key level about $958.Is this the turn that puts oil bullish again, with a goal about $85 as Goldman Sachs has targeted? With gold shooting to new highs, and the dollar breaking to new lows? It's the kind of question that one hates to try answering on a Friday! Manfred Zimmel of amanita.net issued his newsletter stating that the deflationary thesis should be disregarded. And I acknowledge that, now that the Dow Industrials (and perhaps Transports soon) have gone above January's high, I'll owe a big-picture review of the bullish scenarios.
I would also prefer to see whether, or not, the dollar loses support at or just under 77.92 which is the key Fibonacci retrace I've mentioned before. So far it has not tested that level today. So, as "stick in the mud" as this might sound with today's eye-opening movements - I still also want to see gold break over $960, the dollar break under 77.90, and oil move to new highs, to embrace more fully the bullish picture. Well obviously, seeing the QQQQ's put behind $39.82 and similar levels for the equities indices would be nice too.
At least we can say that oil seems on the way to doing its part! Obviously, if it loses support such as USO at its nearby 50-day moving average, then it would look bearish again, especially if accompanied by the dollar making a key trend reversal. It's just that the movements in these asset classes today is just the type of thing that Raymond Merriman predicted last weekend - only thing, we've seen big drops in gold, oil and euro, and now this instant turnaround. So which is the head-fake and which is real? Will be interesting to see if he addresses his thoughts on that in this weekend's update!
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