This count is how I view what is happening. We are currently a wave 2, There are two targets the 38.2% fib retracement level 22.96 if that breaks the 23.6% level 22.86. These fib level are from the most recent high and low. The orange horizontal line is the 50% retracement from the previous impulse up C - 5.
If this scenario is correct, then when the Slow Stoch pulls back to the an oversold condition, wave 3 to the upside will begin. This means US gets stronger, commodities get pounded along with stock indexes. Good that comes from this will be lower prices of gas, as oil has broken $92 per barrel.
The danger I see on this chart is that oil range and consolidated through time for almost 1.5 years. now it is in the high range, if destabilizing event occurs such as war, currency issues, addition defaults from Spain and Portugal, prices of energy could rally substantial. However, it is my believe that a pull back is in works with a higher USD, pulling down crude prices maybe the 70-75 area. Looking at the slow stoch, oil is oversold but the trend appears to be locking in. If the bands remain about 80, generally a strength of trend occurs.
January 22nd, is Options Expiration. I really believe volatility is going to be quite high this week.
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