Good afternoon everybody, and welcome back from the weekend. You know, while Monday's action wasn't jaw-droppingly bullish on a close-to-close basis, in the grand scheme of things we have to give credit to the bulls -- the bears had a chance to up-end the budding rally today, but the bulls didn't let them. After a weak start and a dip deep into the red, the indices fought back to a near-breakeven, or even managed to log a gain in some cases. While we're still miles away from a confirmed uptrend backed by measurable momentum, the bullish effort gained some legitimacy today. And yet, the rally effort is still fundamentally flawed as a beginning of a longer-term bullish effort. Let's just start at the beginning. On the daily chart of the S&P 500 below, you can see that not only is the index still above the 20-day moving average line, but it actually used that line as a floor today, pushing up and off of it at mid-day to rally back to what was effectively a breakeven. At the same time, you'll see the VIX made a mirror image of that move, kissing its 20-day line as a ceiling and then rolling over to test its 50 day moving average line (purple) as a floor. It didn't break under that floor, but it is pushing into it right now at the same time the S&P 500 is testing higher highs. Given today's non-bearish outcome, I really think we have to use the 2008 level as our first checkpoint and even our potential stopping point for this gain. All the same, the 50 or so points between here and there could make for some good bullish trading. The daily chart of the NASDAQ Composite looks similarly bullish. That is, it managed to make a higher high and a higher close today, eclipsing its 20-day moving average line in the process. You'll also see the VXN trending lower, ready to test what's going to become a major floor right around 22. If the 22 level breaks as support, that could be a good confirmation the NASDAQ Composite is gunning for its convergence of technical ceilings right around 4875. I honestly don't even want to make a public prediction about what might happen when and if the aforementioned resistance areas are tested. In fact, I'm hesitant to even suggest any sort of outcome in the near-term future based on the last couple of days worth of action; anything still could happen. This market has just been soooo choppy, and I don't think we're out of that bigger-picture phase yet. You know what's funny though? Just because the U.S. markets are range-bound right now doesn't mean other markets aren't giving us bigger and better trading opportunities. I don't know how much you've kept up with the economic turmoil in China, but we've seen a couple of less-than-thrilling sets of data from the once-red-hot country just in the past few days. What's not been as highly touted is the thumping Chinese stocks have taken since the end of last year. They're down 25% year-to-date. A move of that magnitude could be really good in that it's a bounce opportunity, or it could be really bad as an omen that the country's economy and stock market have fallen off a cliff. The question is, which one is it? I can't tell you here, but I can tell you John Monroe over at the Elite Opportunity offered a specific trading idea on Chinese stocks today. I'm glad he did too, because I fear U.S. stocks could ultimately be range-bound for a while. Chinese stocks are poised to dish out a lot of trade-worthy movement in the foreseeable future. If you'd like to tap into those opportunities you hear little about in the United States, now's the time to become an EO member. Here's all you have to do, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ Like I've mentioned before, John's the best I've ever seen when it comes to finding the market's biggest and best (and often overlooked) trading opportunities. Oil and Gas Supplies, in Pictures You may or may not have seen this today, but Quantum Power & Gas Services managing partner Beth Sewell opined that natural gas could fall to less than $2.00 per MmBtu in February following a relatively mild January... in terms of cold weather. Yes, the midwest and northeast have had their fair share of snowfall this season, but it's not been perpetually cold the way it usually is. Sewell went on to say that if February ends up remaining relatively warm thanks to this year's El Nino effect, natural gas prices may even fall to a 20-year low of $1.50 per MmBtu. Anyway, the whole thing got me thinking about supply-and-demand of not just natural gas but also of crude oil. Since we've talked about this information before -- and even charted the supply data for crude oil -- I thought we'd go ahead and show you the natural gas supply chart and update our chart of crude oil stockpiles. Let's first look at our natural gas stockpile chart. I'll go ahead and warn you now this one looks considerably different than the stockpile chart of crude oil, in that natural gas supplies ebb-and-flow in a predictable seasonal pattern. That is, they run up to a peak in November in anticipation of the need for winter months. Well, take a look. Though the ramp-up late last year wasn't wildly out of the ordinary, it's clear it was above the recent average ramp-up. It's not terribly discernible on our chart, but we're also way overstocked for this point in the year. Sewell's concern isn't unmerited. Now, are you ready to be blown away? In retrospect, we could have easily justified showing you this chart once a week as the data was released. I'm talking, of course, about the nation's crude oil stockpiles, which have ultimately created an unwieldy glut. One would have thought by now the sheer pain of cheap oil would have whittled the bulk of the oversupply away. One would be wrong, however. As the chart of the nation's total crude stores shows, we're still right on the cusp of record-breaking levels; the glut is not being chipped away at all. As for what you can do with this information, well, that's up to you. From my perspective, however, while I do think the crude oil is at or near its ultimate low price, I still think it could be a while before this supply is crimped enough to let crude start to recover (gain in value) in a meaningful way. While natural gas is clearly more cyclical than crude oil is -- and I still think we'll see the usual second-quarter stockpile lull -- that low is still going to be at oddly high levels. That too is going to keep natural gas prices curbed. This year could be another tough one for the energy sector. That being said... Bad For Energy Stocks, Good For... Last week I commented that the leadership from the utilities sector was a problem for the budding rally. Utility stocks are the quintessential "safety" names, and if traders are gravitating towards them then they're not truly thinking bullishly or aggressively. Care to guess which group led today's rally? Once again, it was the utility sector, with a 1.0% gain from large cap utility names and a 1.7% advance from mid cap utilities. With that as the backdrop, and in light of our other conversation today, I think we can at least assume part of the strange strength from the utilities sector stems from uber-cheap natural gas prices, which makes it cheaper for your utility company to deliver electricity. [There are some contra-theories to this idea, but by and large, low fuel costs help utility players simply because utility companies don't pass all the savings along to you as a utility customer.] The point is, if we have good reason to think 2016 is going to be an oppressive one for oil and gas prices, then this year could also be an inordinately profitable one for utility stocks. It's not normally an industry would be overly excited about, but mostly we're interested in going to where the money is. Besides, the rest of the market is starting to agree. We don't necessarily want to let anyone else beat us to the punch. Just bear in mind it's a long-term idea. I don't know that I'd be chasing the utility group as a whole right now in the wake of sharply higher stock prices. The strength from the sector may also be a clue that traders aren't decidedly bullish here.