Oil quotes zigged and stocks zagged yesterday, but the net result was not quite what we would have predicted. With July Crude off a whopping $3.34 on the day, we might have expected the Dow to leap with exuberance, given that investors have been consumed by worry lately about the skyrocketing oil prices. Instead, the Dow finished the day with a modest 69-point gain. What this suggests is that investors don't trust a mere one- or two-day selloff in energy futures. Is it perhaps because, each time this has occurred in the recent past, prices have rebounded to new highs with stunning speed? We have no doubt that a dramatic fall in the price of oil would be bullish for stocks. But judging from yesterday's price action in the latter, the decline would have to be sustained and significant in order to coax wary investors from their bomb shelters. A week during which oil futures have fallen by, say, $20-$25 would probably do the trick. But is this likely? From a Hidden Pivot perspective, despite yesterday's selloff, odds are still with energy bulls at the moment, since July Crude has an outstanding rally target $2.40 above the recent record high at 135.09. Moreover, in off-hours trading Tuesday night the July contract was turning up without having even gotten close to the 126.48 target of a corrective leg. So far, the bullish turn has come from a low of 128.10, implying that yesterday's decline may have exhausted short-term sellers. Duck and Run Our bullish outlook would change, however, if the July NYMEX contract, currently trading around 128.75, were to fall below 123.74 today. Alternatively, a thrust above 129.46 would be warning bears to duck and run. Speaking of bears, a CNBC guest yesterday suggested that oil players with a high tolerance
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