Yesterday was driven by the oil market. The market sold-off at the opening. Then we had the weekly petroleum report which said oil inventories dropped. This led to a big rally in oil. However, one day's action has to be put into a larger context. Note on the weekly chart we may be printing a double top. Also note the RSI has yet to rise above previous levels. Prices are just above the 50 day EMA, but the 10 and 20 day EMA are fast approaching from below; both will probably continue moving higher through the 50 day EMA in a bit.
Despite yesterday's action, notice that the RSI has been remarkably weak over the last few weeks. In addition, prices are still below previous levels. However, the EMAs still have a very bullish bias -- the shorter are above the longer and all are moving higher.
Oil was a big reason for yesterday's price action in the markets. Notice that markets started out lower on the news of China's sell-off. But prices rose to near opening levels. Then we learned there was a drop in crude oil inventories which led to a huge market rally. Near the end of the day prices sold-off a bit, but that is to be expected. However,
In the 5 day picture, notice that we're still within the Fibonacci retracement levels. And on the daily chart:
We're simply bouncing from technical levels.
