China’s big rate announcement and other saber rattling from central bankers sent the market higher this morning, but now the gains are starting to retrace into the afternoon.
This is classic central bank trading.
After all the other rate and QE announcements I can recall, we experienced the same behavior – a big immediate push followed by a strong settling (and even occasionally the markets correcting lower). Historically, this lasts for about a week before we take off like the Hounds of Hell are hot on our heels.
On the news Brent is back above $80, and WTI is following. We’ll get about a week (half week for the holidays?) of puttering around, probably lower. This is going to suck all the shorts and panic money into the fade (“They failed!”). Right in time for next Tuesday or perhaps the Monday thereafter, when approval to increase allotments gets pushed down from management and markets begin the happy process of murdering anyone caught short. Just in time for Christmas.
See you in December.
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Hounds of Hell. lol
NADL back on my radar. Looks tempting with such a low valuation. Knowing stocks can stay oversold a while , what’s your take at these levels?
I sold my entire position in NADL when they “delayed” the Rosneft deal. I am not interested, that was a critical component.