The major indices are sluggish with the iShares Russell 2000 Index ETF (IWM) lagging again, but the question of the day is whether to chase oil stocks higher. After the surprise OPEC deal they have been moving straight up. In some ways, the action in the group is similar to what happened to the overall market after the Trump election. Market players were poorly positioned and their scramble to adjust created sustained momentum that lasted weeks.

I’m not predicting that the oil rally is going to last weeks, but I am inclined to believe that this is not a one-and-done situation with the strength being sold quickly. The OPEC decision is especially notable because it shows that they are capable of actually making a deal. Wide-spread cheating is anticipated, but there is at least a hint at some discipline when it comes to controlling oil output.

Under the surface, biotechnology is notably weak, and the speculative small-caps are having trouble. If you are looking for pockets of momentum outside oil you aren’t going to find much. Yesterday my list of stocks that were up over 10% contained four or five names. Today the list is over 100 names long and almost all of them are oils.

I’ll be looking to buy more oils into the close. There are so many of them moving that it is a bit overwhelming, but I’ll be focusing on those with better relative strength like Resolute Energy(REN) and Matador Resources(MTDR) .

Oil is the name of the game today and the likelihood is that it might last longer than many traders think it will.

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