I was hoping oil stocks would continue with a leadership role, since the sector was about the last area showing strength. That idea was thrown out for now after DIG moved back within the wedge, and tanked into the close.

The Nasdaq blew right through the long-term trendline from the last October high. The bulls have left the building. Have a Happy 4th.

I’m not so sure that today’s lower close for oil stocks isn’t just a headfake. OIH broke above 221 yesterday, and should retest that level, which it quickly did today. The close below 221 raises red flags for a possible failed breakout, but I’m guessing not. Note how OIH stalled at the intraday 200 ma on the 5-minute chart. It shakes out longs with stops under 221, but doesn’t pull too far away either. Probably crazy, but I bought some DIG near the close.

I’ve been in and out of DUG, and waiting for another move lower to shake out some longs before really commiting anything there. I wouldn’t mind seeing a blowoff top type move in oil land here. We’ll see.