Oh well, the rotation was fun while it lasted. Dreams of turning spoils into riches has been placed on pause, as WTI got crushed by 4%, sending all of the oil stocks into the sewers to rot in hell.
Banks digested their gains with grace and tech reestablished their hegemony over the markets — surging ahead by more than 1%.
While people might focus on that, the real story was the continued dismantling over the auto sector — with AAP and ORLY leading the pack with horrendous losses.
Why do I always focus on the risks?
Because the only thing that matters is the drawdowns. Take it from me, a man who has made and lost more fortunes that I can count on both of my hands. While I remain dutifully long stocks and optimistic that the current trends will persist, I am, in a sense, paranoid about the potential pitfalls. When they happen, they always seem to come out of left field, they’re swift, cruel, and merciless, and they suck the energy and fun out of something that can be extremely rewarding and enriching.
I watch the risk side because hardly anyone else is doing it.
Botton line: today’s selloff in crude can be a resumption of the long winded decline we’ve seen since the beginning of the year. Couple the retail weakness with the fact that the auto sector is under siege, and there is a case to be made that the economy really isn’t doing too well — which may, in fact, bode well for an easier Fed and higher gold prices.
Or the opposite. Stay tuned.
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If not for the IF-THEN-statements on the dow [chuckle]
I.e. if dow drops x points in y amount of time, [chuckle]
…move dow back up equal points x over y minutes [chuckle]
Look at the chart
Dow & spy dropped about .5% over 40 minutes after open
+.5% over the next 40 minutes, very, steadily
Um, hundreds. of times. Hundreds. As I started saying in 13
[chuckle]
This money sloshing back and forth between sectors indicates … to me anyway…that the market movers are getting desperate for return and they can’t find it.
I mean what are these moves based on? Did someone suddenly announce oil was dead and there was coin to be banked in tech again? Were there dozens of positive earnings reports today?
Because there is mo rotation. Three weeks ago rotation was supposedly occurring from tech into commodities. Today’s API report was extremely bullish (a huge gasoline draw? In July?) and when EIA follows suit tomorrow we will see the direction. WTI is already retracing upward.
Fedexit, is crashin euro equities.