Monday, the refinery strike headlines put a bid in oil following a few bullish premises from Friday. On Friday, we came into trading oil with headlines stating that ISIS was thought to be once again trying to gain control of northern and eastern Iraqi oilfields. That, coupled with it being the last day of the month, caused oil to rally. Many who trade the energy space on Wall Street think that even though oil appears to be forming a base there is still room to the downside. Inventory data is due out Wednesday and most think that it will show a large glut and once again send crude to lower levels. But if oil hangs in and still moves higher I think the bears will have to admit defeat. The S & P 500 cash continued to perform weak for most Monday and made a series of lower lows and came close to giving us another test of the 200-day moving average (1975) that I have been calling for (#HumbleBrag) Read More New York trader: Beware head-and-shoulders chart The S & P stopped just short of the 200-day moving average Monday and bottomed at least for the day at 1,980. Continue to watch for another test of that level this week. If we break the 200-day, we could be looking at sub-1,900 levels very soon. We learned Monday that U.S. factories expanded last month at the slowest pace in a year, as orders, production and hiring declined. How long can the U.S. continue to be the best performing country in the world? Is this report the first chink in the armor? Markets are swinging so quickly on a regular basis that at least it's giving fast traders great money-making ability, but longer-term investors can't ignore the fact that lower lows have become commonplace. I don't want to overstay my welcome as a guest in the bear hotel, but it just seems too early to checkout just yet. Read More February outlook: Retail, energy and a correction? On the individual stock scene, Twitter earnings are in focus (I still own it ) and are definitely the most interesting earnings event of the week. My opinion is that sentiment is so low that the downside risk seems limited, but the upside potential seems very attractive. Steven Grasso is director of institutional sales at Stuart Frankel. Follow him on Twitter @grassosteve . D isclosure : Long Twitter, several big cap U.S. stocks
