Can we say that stocks and oil prices are officially no longer attached at the hip? Maybe… I know very political answer right? I would have said yes if crude had stayed down 5% as it was in early trading Monday. But, since crude rallied to lose less than one percent on Monday… it would still show some correlation between the two still exists. Despite the fact there was not a deal completed to freeze production or, as many had hoped, no cut in production either. I am sure you have read all the headlines thus I will not repeat the meeting data, but I will leave it with what I stated last week… It hasn’t happened until the check clears the bank or in this case the data confirms that everyone has cut or frozen production levels. Armed with this data the media was quick to point out that oil is headed $30 per barrel quickly… At first it looked as though that might happen today… but, many doubters turned into buyers and the bounce off the lows showed resilience. Therefore, we cannot count oil out nor did stocks show much in terms of selling as it related to the crude oil story. It is a non-event… until the inventory data shifts.
Key items to watch related to the story in crude:
SPDR Energy ETF (XLE) cleared the $62.50 level last week and tested lower to start the day, but closed up 1.8% and at the $64.50 resistance. Not what you would expect and this is one to watch as this unfolds.  XOP, IEO and IEZ are in the same boat to break down the sector further
United States Oil ETF (USO) moved below the $10 support mark and them closed at $10.15… again watching how the oil story unfolds, but the commodity remains in a trading range. Wednesday is the weekly supply data and it will have a baring following the Saudi Arabia news.
Another key sector with questions moving forward is the technology stocks. Earnings are going to make or break them as they start next week. SPDR Technology ETF (XLK) has been stuck at resistance of the November/December highs. There are rumblings about the enterprise stocks struggling as it relates to the global markets and it could be reflected in the earnings data… thus, watching and protecting against the downside reversal is important as we approach next week.
Software (IGV) made a move higher on the day above the $101.40 resistance and could move to $106 on the breakout if earnings support the move.
Networking (IGN) not as pretty with a head and shoulder pattern and $35 neckline or support for the sector. Break lower would be negative for the sector.
Semiconductors. (SOXX) hitting against the $92 resistance and needs a catalyst to push higher. Earnings could be the answer.
Social Media (SOCL) cleared resistance and the 200 DMA last week showing some promise for the sector near term. Watching earnings here as well.
Cyber Security (HACK) trading sideways in range and needs some upside help short term. Earnings… may help.
Putting them all together as it relates to the large caps (NASDAQ 100 index) is even more important for the broader markets. $111.50 level to clear on the upside to add some momentum to the index. Again it is all about the earnings reports if the upside is to gain any near term momentum.