Overbought Market Looking For Pullbacks

Since Friday when the DOW printed at 16016 we have had a rally of over 800 points in 3 business days. Today the DOW got above the 16800 level. On Friday the S&P futures traded down to 1882.75 and today they traded above the 1980 level. This is signaling a very overbought market. I am looking for a pullback in the next 1-5 days. I think the market is trying to search for a bottom. I am going to raise my target from 15500-15900 to 15600-16100. I do believe the market will make a higher low in the next 1-2 weeks and I am 75-80% certain that the low of 15379 will be it for the year. Oil had a monstrous day today up more than $2.30. I have been saying that 44.14 is a very big number for oil. Oil traded down near this level a couple times, even getting down to 43.97 before snapping back up and closing above 45. If oil stays above the 48 range I will get a buy signal on the weekly charts. I will then have a buy signal on both the daily and weekly charts and would be looking to buy on a pullback. If oil closes above 48 on Friday I will be looking for a pullback. A couple weeks ago I mentioned that I would be looking to buy SN (Sanchez Energy) in the 4.50-5 range. SN traded down to the 5.10-5.15 range and now is well above 7. This was a good buying opportunity but it did not enter my range. If oil pulls back the oil stocks should have a similar pattern on the daily charts. Gold was up $8-9 today. Gold has a bid because of talks of no interest rate hikes in 2015. If gold gets up to the 1155-1175 range I would be looking to sell any gold positions, especially gold stocks. I do not see gold getting above 1200 and gold has been down the last 5 quarters. I am bearish on the weekly charts on gold and I think it is dead money.


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