Jamie Dlugosch

A Glimpse of Encouragement

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Jamie Dlugosch takes a look at the hottest topics to keep an eye on throughout the day.

You have to like what is happening in the market. Compared to the volatility and craziness of 2008, the last few sessions, even accounting for low volume, is encouraging.

Yesterday we were long overdue for some profit taking. Indeed stocks sold off at the start of the session, but they did not collapse. It was a rather uneventful day that included a run or two at break-even for the day. When the final bell rang the Dow closed trading with a loss of 82 points. Not bad considering that most players have returned from holiday vacations.

Heck, we even had the President-Elect making noise about how crummy things were in the economy. He even said we can expect worse. On those dark days of October the market would have sold off by 500 points or more on such language.

Not this day. A new optimism is rising from the ashes. Will it be sustainable? It will take economic data that is better than expected to keep the rally moving. Then again, a few more days of profit taking builds a stronger base for the next bull run.

Oil moved higher on news from the Middle East and Russia. Though both conflicts are isolated, the market is concerned. The bigger issue seemed to be that OPEC production cuts were taking hold. Though not big enough to stem the tide of shrinking demand, solidarity from the cartel is a bullish sign. Imagine where we go if the cuts go deeper? I'm betting on $100 before the end of the year. Crude finished the day above $48 and is up over $49 this morning. The next stop is $50 and higher.