With the crude oil market trading down 4.25% and the Dow and the Nasdaq on the move, today King World News is featuring a piece from one of the greats in the business discussing what is happening around the world and in major markets.

By Jeffrey Saut, Chief Investment Strategist at Raymond James

"As of this moment WTI is 10 Bucks higher than when you called the low with the Brain Surgeon on Jan 27th." — Yesterday's email to me from Eric Kaufman, captain of VE Capital

April 8 (King World News) – I received this email yesterday from Eric Kaufman, arguably the best energy centric portfolio manager I know, with May crude oil trading towards $54 per barrel. While we didn't get the exact low, markets are kinda like horseshoes and hand grenades, all you have to do is be close! To be sure, oil was a big winner on Tuesday with a rally of ~3.5%.

The recent rally began on Monday when Saudi Arabia surprisingly raised prices to Asia over the weekend. The rally extended yesterday driven by the headlines, "U.S. Raises 2015 Gasoline Demand Estimate to 9.07m B/D vs 9m previously / U.S. Gas Pump Price to Average $2.45/gallon this Summer" and "[The] EIA raises demand for oil forecast by 60kbd and LOWERS supply growth for 2015 from 700kbd to 550kbd."

The result left crude oil $10 above our "bottom call" of last January, and if it can decisively break out above $54/barrel, the chart pattern will look like what a technical analyst would term a "reverse head and shoulders" bottom with an intermediate-term price target of $60 – $65 (see chart on page 2). Of course crude's bottom was telegraphed by many of the energy indices, which are now up roughly 11% from their mid-January lows. While we would expect some upside resistance at the $54 "neckline" of the aforementioned chart pattern, we believe eventually prices are headed higher.

Not so, at least in the near term, for the overall equity markets. There still appears to be a double-top for the S&P 500 (SPX/2076.33) at the 2114 to 2118 level; and as stated in yesterday's Morning Tack, "[Monday’s] rally took the SPX back into its 2080 – 2100 overhead resistance zone and just 4 points shy of its 30-day moving average at ~2084.

Also of interest is that the NYSE McClellan Oscillator is about as overbought as it gets, save the selling "climax low" of October 15, 2014 … [Moreover, the indicators] suggest there is a window of downside vulnerability over the next five weeks and that the stock market's internal energy has been totally used up."

That lack of internal energy was evident yesterday afternoon as the Doleful Dow went from up 100+ in the morning to minus figures late in Tuesday's session. This morning the preopening S&P 500 futures are flat again despite more M&A activity overnight and today's FOMC meeting minutes as things remain curiouser and curiouser down into the rabbit hole… ***ALSO JUST RELEASED: A Remarkable View Of The War In The U.S. Dollar (Crucial To Gold & Silver) And Crude Oil Markets CLICK HERE.

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Eric King