Will History Repeat?

Stocks have moved in the opposite direction of oil prices over the last several trading days and today was no exception.

The good news is that the S&P managed to bounce from its 50 day moving average. The next question is whether history will repeat and we'll see another counter-trend failure much like we did last October.

The market was very overbought last Monday and the pullback we've seen has been constructive. That said, there is always a fine line between a garden variety overbought pullback and a failed rally.

For now, the jury is still out, but clear battle lines have been drawn. A resolution of the pattern above should be of tremendous help to us as we enter the final month of the second quarter.