The 419-point move for the Dow +2.4% is the biggest since November 30, 2011.  A lot was short covering, but those covering were not mom and pop investors…but sometimes, smart money throws in the towel.

Yesterday, the biggest news was not headline news and most market-watchers were not paying attention either.  The decoupling of equities from oil is huge; even after a rebound attempt in oil failed and crude tumbled, stocks kept moving higher.

This is big stuff.  It clears the way for good news on gas to be good news, not a deflationary red flare.

Here’s the technical part of our Special Oil Report:

West Texas Intermediate
Technical Chart
December 18, 2014

When any asset is in free-fall, picking a bottom with any tools is virtually impossible.  While the same experts who once told us that $100 was of great support, particularly in light of constant turmoil in the Middle East, have now come around to a “four handle” (trading in the $40s), which is inevitable and we can’t ignore them.  Snicker?

Yes!  Dismiss out of hand and the answer is no.  This slide is emotionally driven at this point.

Right now, $54 looks intriguing, it seems to be a swing number, and we should expect below that point; $50 could be support.  For investors, the key is the upside…where the oil and oil-related assets and food chain (construction, banking, even some junk bonds) become stable buys? However, $56 is a key resistance point (on closing basis), but the magic number will be north of $60.00, with the breakout above $64.00.

I am not sure where that happens, but I think it will be a 2015 event.

Moreover, I am less concerned about the deflationary aspects of the crash in oil, and while it is not an automatic cure for the economy, some believe it is coupled with more jobs and higher wages; 2015 could be huge.  It would be huge, even if oil edged back into a trading range with support at $60.

Charles Payne

Founder & CEO

Wall Street Strategies

Today’s Session

Futures are fading fast from yesterday’s highs. This may have something to do with the quadruple witching taking place which is when all stock options contracts expire not only on the same day, but at the same time. We had some positive news from corporate America: CarMax and Paychex, although not major market movers, saw both top and bottom line revenue beats. Later today, we will be greeted with manufacturing news from both the Atlanta Fed and the Kansas City Fed. Preferably, the Districts demonstrate expansion.