As I looked through charts tonight, the big standout was the big volume spike in USO, the oil ETF. Oil has sold off relentlessly since July, and price currently sits way below the 200 day moving average. We have seen generally higher volume during the past week, and extremely high volume today. The ultralong oil ETFs will look especially good if we can break up through the trendline on heavy volume.
If oil continues to rally from this point, oil services stocks will likely benefit. OIH has been moving steadily higher on heavy volume during the past four sessions.
Looking at the broader market, we are overbought, but the buyers are still in control.
So the basic conditions appear to be an overbought market with a potential bottom in oil, along with strength in other commodity areas. Shippers are looking strong, and appear to have more room to run. EXM is an example:
Also look at GNK, TBSI, GNK, and DRYS. If we get a general commodity rally, all should continue higher.
