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Glaring Divergences Emerge Between S&P 500 and Oil by Mike Paulenoff


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    Mark S. Young

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Posted 04 April 2016 - 02:01 PM

 
Glaring Divergences Emerge Between S&P 500 and Oil
By Mike Paulenoff, MPTrader.com 

 

For the past two weeks, the heretofore, inseparable tracts of the Emini S&P 500 (ES) and Oil have seriously diverged.

 

 

Since Apr 22, ES is up about 1%, while Oil has declined about 14%.

ES remains in a well-defined uptrend, while Oil has carved out a meaningful, near-term downtrend after its Feb-Mar advance from $26 to $42.

 

 

Of course, from a much longer-term perspective, ES is in a multi-year bull trend, that is recovering from a 14% Jan-Feb correction, while Oil remains in the grasp of a vicious bear market from $110 to $26, and may have merely ended a "minor" recovery-rally period.

 

 

In any case, as long as any weakness in ES holds above 2040, the bulls will keep directional control. Oil must remain north of $36.00 to avert downside continuation towards $34.

 

 

That said, we have to be mindful of a directional re-coupling between weak Oil, and a roll-over in ES.

 

 

See chart patterns at https://www.mptrader...1604043395.html

 

Mike Paulenoff is founder of MPTrader.com, where he provides live intraday analysis and trade alerts covering the equity, commodity, and currency markets.

 


Mark S Young
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