Ok so here's the deal

Oil and commodities are going parabolic. I'm seeing insane moves in smallcap oil and energy names, ie PDO, etc. Usually this kind of stuff happens as we enter the final stages of a momentum group. Oil and energy has been rallying for years now. I don't think we are near the top price wise, but we are near the top time wise (over the next few months). When a sector goes parabolic it can spike higher than anyone can imagine. In fact, the most money can be made actually going long on a parabolic move because prices go vertical.

The broader market is getting hit by these issues but it's important to remember that commodities are always CYCLICAL. Oil going back to $35/barrel is not out of the question. In the near term however, we are going to be plagued by issues of inflation. The Fed simply cannot continue to drop rates in this environment, and will need to actually raise rates soon. The fact that the Fed minutes today showed that rates will most likely not go any lower but did not cause the dollar to rally or oil to fall (it actually dropped, and oil actually rallied) is quite worrisome.

Tomorrow will be a critical day. Sometimes the initial reaction to anything Fed related cannot be trusted, so we'll see if the market can stage a rally.