Don’t Be Such a Crude Trader

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This morning’s earthquake in Japan might as well have happened ten years ago, as many market players have already moved on to freaking out about the rise in crude oil. As you can see pretty clearly, there will just about always be macro headlines that cause great consternation amongst traders. Regarding crude oil, the work that I have done leads me to believe that it is only when we see a breach and hold above $120 a barrel (on WTI light sweet crude), that there is just cause for concern with regards to a direct negative impact on equities.

With respect to the broad market, you can see on the intraday 30-minute chart of the SPY above that we remain range-bound, despite the news out of Japan and the rise in crude. I am holding several longs now, but an open to changing my posture should we lose support. In other words, if you are a trader who seeks to profit from the fluctuations in the prices of equities, you would be best served to stay on point, and leave the macro arguments to blowhard economists on television.