If Goldman Sachs is correct, and crude is on the verge of a so-called super spike. Just imagine a move to $200 in crude can now be logically argued. According to a report from Goldman such a scenario is possible during the next six months to two years that sees crude spurting to $150-$200 a barrel. Of course that couldn’t happen if the world wasn’t doing well financially, yet the amount of animosity would be so great that there would be blood.
While all eyes are on a possible super spike in crude oil prices, equities are bubbling up like they're ready to gush significantly higher. For all the speed bumps that lay out in front of the market, stocks have momentum. There's a wind in the sails of the market. I continue to fret (just a tad) about volume - it's the only thing that gives me pause - and I would love to see some 2 billion share days. I also would like to see greater participation but that's a function of thin volume that is always seeking out opportunity. This would suggest a lot of long term money is still parked on the sidelines. This makes sense in part because long term money doesn’t have to sweat all the gyrations of the stock market. The great news is that these investors aren’t interested in picking the bottom and once they’ve committed, they’re in and I have to believe they're ready to put money to work.
One of the positive signs to the market in addition to its obvious resolve is that key sectors are participating including transportation stocks. Despite the surge to record highs in crude, transportation stocks have made a magnificent move, mostly under the radar. That Dow Jones Transportation Average is approaching a double top and that is great news for the broad market. By the way, for you beginning chartists, take a look at the perfect double bottom the index put in back in January.
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