Oil Market, DOW Jones Daily and DOW Jones Weekly forecast 5-8-2011

Oil market really spiked that caused disturbance to the global markets specially the Inflation battle of each and every country and each and every consumer of Crude/Oil. With the rise of oil, Interest/Loan late rises to fight inflation, policies to fight huge company costs are raised, and small businesses are pressured to earn more money despite the commodities cost/expenses. Recently, Oil really pushed up where it went on an overbought level at 116/117 where its almost the 150USD point where Global market nears its market where it got the recession.

Now it is in temporary correction level at 97, and could reach up to as low as 90 in few weeks ahead. Take this an opportunity for Oil Traders to buy from dips, and for consumers to Gas up all you need once roll back has occured (if the Oil companies are honest with the computation of Global Oil prices)




We were discussing last week that DOW Jones went to much to an overbought level where needed correction must happen, and it almost hit our correction target of 12500, Now it is at RSI level of a good bull market correction, and might take some time to relax at this level for few days, before it attacks the 52 week highs. Daily chart looks so good for the run, but my concern is the Weekly Charts below.



DOW Jones Weekly charts shows us how great we can achieve and is raising bars to get into new highs up to the old 14k level before the recession. This bull market still shows strength and a lot more possibilities of making into new highs. But my concern now is the Negative Divergence formed in the Weekly Charts. Seeing Negative Divergence in a weekly chart is more effective in forcasting market correction than Daily Charts. It poses a threat as of now, but may just be a good reason for DOW Jones to rally so high that could negate this bad signal.

Once the negative divergence can be pulled off by good and huge rally of this Market. I have drawn above my personal forecast of the DOW Jones in the coming weeks/months. A race to the 13,500 level around Q3 or Q4 this year.

Notice how OIL and Global Market tandem together. Now has Oil dropped 15% will Global Market follow? Let us see, as long as they are uptrend together, I dont see DOW Jones must get that 15% correction also. If Oil bubble, so will DOW Jones/GLobal Market.

Good luck!