OIL DIP UNDER $40 GIVES MARKET A BOOST -- WEAKER DOLLAR HELPS GOLD AND MATERIALS -- S&P 500 TRADING OVER 50 DAY AVERAGE

S&P EXCEEDS 50 DAY LINE... In a continuation of the rally that started on Tuesday, the market is trading higher today. Earlier in the week, the Nasdaq 100 was the first of the major stock indexes to exceed its 50-day average. The benchmark S&P 500 is trading over that resistance line in morning trading. Part of the impetus for the stock buying is today's dip in crude oil back under $40. That also explains why energy is the day's weakest sector. The Oil Service Index, which has been the weakest group in energy, failed a test of its 50-day line and is leading energy lower today (Chart 2). While oil is dropping, gold is trading $6 higher. The dollar is falling to a three-week low against the Euro. That's giving a boost to gold stocks and material stocks in general. Chart 3 shows the Materials Select Sector SPDR trading over its 50-day line in early trading. Intermarket forces have turned more positive for the market. Now it's a question of whether the market can sustain its gains through the rest of the day.

Chart 1

Chart 2

Chart 3