Oil $98.50 Here We Come?...Look for Stocks to Move Higher

Futures are higher in pre-market trading: Dow +132...S&P +13...Nasdaq +27...Russell +9 As we have written over and over again...oil is the primary driver in the market and if oil continues lower, expect stock prices to continue to trend higher. Oil traded under $111 in electronic trading Monday. However overnight oil has continued to drop and is now trading near 107.90. Anyone who follows our teaching, knows Dave empahsizes trend like no one else and that one of the key responsibilities of traders is to determine the difference between price flucuation and trend change. One point that our posting have consistently stated since early August is that the trend in oil has been down. We have empahsized over and over again the differnce between macro-factors that drive trend and short-term factors that influence daily price fluctuation. Yesterday and this morning we are seeing trend exert itself in price in a very significant way. This is good news for both the economy and stock prices. On Tuesday August 5 we posted the following: "Oil fell further down $2.24 and gold dropped $21.80. The new chart target for oil is $98.50." (Bold is as posted in the original post.) We further wrote on Friday, August 8: "The technical evidence indicates a chart target of 98.50 for oil and we believe that a continuation of the down trend in oil prices is the more likely outcome. Short-term factors like weather or Middle East tensions could cause oil prices to fluctuate to the upside, but would seem unlikely to reverse the intermediate term down trend." The charts do show us the most probable outcome. We just have to be willing to look and then act on the opportunities they give us. Dave's Insight: The Trend is the Most Important Factor in Every Trade.