Market May be Ready to Reverse - Oil Strengthening

On Friday the crowd reacted favorably to low job numbers in the employment report. This is because they were expecting that low numbers will force the Fed to take a breather on rate hikes. Of course the enthusiasm attracted profit takers and short positions as these buy the news events almost always do. Technically the sell off from the highs left the indices in poor technical shape with the dust settled on the day. The S&P tagged the under belly of its broken trend and sold off and the QQQQ sold off from its falling 20-day average. Momentum left from earlier buying last week however does not yet appear to have abated. We could potentially see higher prices this week but keep in mind that damage has already occurred and that shorts will be looking to build positions into any further rallies. The commodities market on the other hand is once again heating up. Many oil stocks are resuming their trends and gold prices are hammering out support. We are not confident that gold is done with the downside yet, but certainly any further dips in this sector will represent buying opportunities.