Those who have been trying to catch the bottom in oil have gotten seriously damaged. It has even spilled over to equities, but today, the equities are shrugging off the overnight weakness in oil as Europe is getting excited as QE is nearing.
This crude oil fiasco will pass, and that is when you get a rip roaring rally that will leave the bears speechless. This is still a bull market, an aging one, but a bull market nonetheless. The path of least resistance is still higher, so that has to be respected. We are getting another monster gap up despite weaker oil. We have shaken out the weak hands, and yes, VIX is stubbornly high, which is worrisome if you are bullish, but there are more bullish factors than bearish factors at play.
This week should eventually grind higher as oil stabilizes here, with the steep contango, these are fire sale prices that will not last for long. If oil goes back to $52, S&P will be back to all time highs. That is a big if, but that is how much weak oil has dampened investor sentiment in stocks.
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