Today's lack of volatility and stabilization in oil indicates the market is going higher in my opinion. The market has had some extremely volatile trading recently. On Monday the S&P traded in a 103 point range! Today it feels like we haven't even moved although the S&P has carved out an 18 point.
The energy sector had been leading the market lower, but bottomed and has led the market higher the past 2 trading days. Oil looks to may have bottomed, and is now more than 15% off its low.
Prior to today, the S&P had a range greater than 44 points for 6 straight days. Today's range of 18 points is chump change. Guess what money managers do after the market settles down from a big downdraft. I'm guessing they are going to buy, and that's why I think the market is going higher next week.
Michael Grove, CFA