The next multi-dollar trend in crude will be lower. It does make sense to own some relatively cheap long volatility options exposure to the upside, but overall if oil breaks my key support area of $51.25 per barrel, it could trend towards a key Fibonacci 50% level in the high $48's.
After doing some technical analysis on the weekly chart of the S&P 500 futures (attached), it looks like if indeed the S&P 500 maintains its strength over the next several months, we could end up seeing 2350 by the summer. That would be around a 4% rally from here, which does not seem too extreme. Major technical indicators still seem bullish for the S&P 500.
WTI crude oil futures have failed to hold below a key previous high point, and now are up 2.7% on the day. As we noted, the major technical indicators we follow still have not really turned bearish on a weekly timeframe. Oil will still be overall supported by bullish forces in the market.
We first focus on WTI crude oil. On the weekly chart, this market still looks strong, and looks to be a buyer's market. We believe that $58 per barrel is not out of reach. A key resistance trendline has been broken and that is a big technical signal.