Gold / Oil / Retail (Update)

As expected, Oil continues to out-perform while gold is pretty much standing still. It has recently broke out of it's trading range and is targeting $92, but is currently at resistance near $87.50. I would expect a pullback near here to around $84-$85 area. In the event of an actual recovery (both home and abroad) it's clear which two of the asset classes will outperform. However there is so much supply waiting to hit the market it's tough to get behind a bull run in oil, just yet. In fact, someone I know, who works at XOM, talks about how slow things are and the amount of crude sitting idle at the refineries and diesel production. That being said, it's doubtful this out-performance can continue not to mention how damaging it could be to an actual recovery.

Speaking of XOM, it has been in a downtrend ever since the acquisition of XTO and continues to be a bearish price structure in which 68.50 (150d xma), $70 and $72 (unfilled gap) will be resistance. If it's able to take out 68.50 then it should be a clear path to 70. Bottom-line: This is still a bearish chart with multiple downward-sloping moving averages just above it. Keep an eye on this and other index Heavyweights going forward. Any breakout in this stock and it's going to pull the entire energy complex (and likely the market) with it.

Even as commodities surge, the retail stocks continue to be the "must-have" as people camp out for their iPads. Seems logical...(right). The XRT is right near the 42.50/43 upside-resistance mentioned here. If there is a full-blown reflation trade that kicks off it will be at the expense of this sector, imho.