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TAM's Pedagogics: March 8, 2011

Yesterday began with a congruency of direction between the Oil & Equity futures; both heading in the same direction, somewhat anomalistic of late.  Needless to say it didn’t last long as the pop-open rapidly became a drop as ALL the 4 Sisters headed south in retreat toward their support levels and 50-DMAs.  As Oil continues to drive this wickedly vicious equity tape, we must keep our attention on the Broadening Wedge formation now prevalent in all sisters. 

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Realizing this is beginning to sound like a broken record, I must implore you to pay close attention as the resolution of this formation will most certainly dictate the following month’s (or two) technical action.  Last week we discussed a potential resistance level on Oil around $110 (stemming back from 10/08).  The point… a $110 resistance in Oil is the last foothold the equity markets may have to hold the bottom side of this pattern.


Good Luck & Keep Your Wits About You!

KAT