Winter Red Coming for Your Head

Crude oil's sharp downside reversal this morning looks to have correlated to the notable fade in equities, with the major indices still considerably off their morning highs. The VIX, however, is still in the red as I write this.

Nonetheless, the crude oil reversal is worth monitoring for the sake of equities and how sensitive they seemed to be to it to kick off a shortened first week of 2017. 

On the USO ETF daily chart for black gold, below, you can see how the $12 area has been a tough nut to crack for oil bulls dating back to last spring. This morning's wave of selling towards that level simply reinforces that notion. 

In fact, the precise high of the day for USO was $12.00, thus far. Many a market pundit would quip that tidbit offers evidence of just how much "the algos" are in control. 

For us, we will simply note the fade and how it correlated with stocks. Headed into the heart of the afternoon portion of the session, it would behoove bulls to recover for at least a respectable close in USO, meaning somewhere closer to green than where it currently is. 

As for stocks, I will delve into them a bit more thoroughly for Members in my usual Midday Video.