Oil Spike? What Oil Spike?

Wednesday's advance shows the markets aren't interested in excuses to sell off -- they're looking for reasons to go higher

By Paul Cherney

Major equity indexes moved higher Wednesday while November crude oil futures settled at $51.98 per barrel; during the session, crude traded above $52.00. Rational thought would suggest that higher crude prices would hurt stock prices, but they did not. Here's my interpretation: The markets aren't interested in excuses to sell off, the markets are interested in excuses to go higher.

The end-of-day momentum in volume and price remain positive for the equity markets.

On the daily chart, the immediate layer of support is Nasdaq 1,960-1,947, then 1,933-1,892.08.

The next focus of resistance for the Nasdaq is 1,972-2,006; this is within a broader band of resistance that runs 1,960-2,055.

The chart for the S&P 500 has resistance at 1,137-1,150.57 (this resistance represents the sideways topping action during June and April). The S&P 500 has additional resistance at 1,147-1,163.23, which makes the 1,147-1,150.57 area a focus of resistance.

Immediate support for the S&P 500 is (intraday) 1,137-1,132, stacked at 1,131-1,126 then 1,117-1,103.24, overlapped at 1,111-1,101 which makes the 1,111-1,103 area another focus of support.

The VXO has moved below 13.43-13.20; if it moves back above this level, that should be coincident with price weakness for equities.

Cherney is chief market analyst fore Standard & Poor's

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