When we traded on the New York Commodities Exchanges, we learned that the typical indicators one relies on, become meaningless when certain factors overtake logic.

Traders can buy up a commodity future ignoring technical resistance, overbought strength indicators and Fibonacci numbers. A commodity such as oil, for example, can go limit up for days. Back in September 1990, once the Persian Gulf War began, crude oil futures ran from $17 a barrel to $29 in a few days.

By October, the price traded to $35.00. By November, it continued to run to $40 a barrel, just before the big sell-off back down to $28.00. In the last month, oil futures traded from $49 up to 57.60. Several factors account for the rally. The most recent news story involves the arrest of Saudi Princes.

Naturally, I see droves of analysts calling for a top of this move. They point out pivot points and overbought RSI’s.

And, they could be correct. Yet, bathers who lack voluntary control of certain functions, like traders who sense a melt-up, find that the weak longs empty out of the pool leaving them plenty of room to swim.

Should new longs heed the County Health Department recommendations? Currently, the oil rally may have precipitated what could be, the moment I have been waiting for. A few weeks ago, I wrote about the historically low ratio between equities and commodities. “The ratio between the performance of commodities versus stocks has only been this low twice in the last 100 years.” Furthermore, equities have enough diversion to suggest the ratio already has begun to narrow. Transportation IYT, is holding the 50-DMA although remains under the monthly channel top.

One sign of over bloated equities would come from this sector, should it sell off more. The Russell 2000 (IWM), after having 2 inside days in a row, needed to close over 148.96 as a start to show commitment from the longs. Closing price: 148.82

Granny Retail (XRT) tried and tried to clear 40.00. Even with Michael Kors rallying 15%, XRT could not make it. That market is relying almost solely on Semiconductors, Nasdaq and FANG stocks. They could still do the heavy lifting and have. However, I can tell you that the other Modern Family sectors must also jump in the pool. Today, Biotechnology (IBB), already in a warning phase, did not do much to attract any new speculators. These days, many Commodities have ETFs to trade instead of futures.