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With everything going on in the world, you might be wondering why I’m starting this week off by going after the Fed. I talked about it on Friday - the spike in oil prices has put the Fed on notice when it comes to inflation.

To be clear - one day or even one week does not make or break a trend, but there were notable shifts underneath the surface of the market last week.

Does this put the rally on weaker footing going forward? 

Let’s discuss…

Bulls Don’t Want to See Energy Lead

The price of crude oil exploded higher late last week, sending the energy sector (XLE) soaring with it. The rally was so strong that it overtook technology as the best-performing sector on a 30-day basis as well. 

Energy is a sector that tends to lead in the later stages of the market cycle. So, after nine weeks of nothing but upside in stocks, we finally have our first real cracks in this rally.

Of course, a lot of this recent momentum hinges on the geopolitical situation in the Middle East. If we see the situation cool off some, we could see a reversal in oil prices, but if not, this is going to put tremendous pressure on the rally going forward.

To put it lightly, this week will be key. I’ll keep you posted,

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