A market that slowly grinds lower like this can be tough to interpret. Each time a new low is met on the day, there’s a response.
In scenarios like this, I try to gauge selling/lack of buying via the $TICK. We’ve had no selling extremes yet, just one buying extreme about an hour ago.
Based off this action, I have taken a December weekly $TNA position. Crude is starting to turn up a bit, and breadth is about due for a thrust.
Other than that, $AAPL is my top pick here.
OA
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Multi-day rally? I like the sound of it. Bought me some $SPY calls this A.M. Seems a simple 50 or 61.8 retracement of this leg down is in order.
One can dream
Sure feels like the other side of enthusiasm — look for VRX, HYG and CHK to continue lower to validate the bear case.
Yeah, been blogging about that $HYG for a couple weeks. It’s not very supportive of upside in this condition.
The market is sick — not the economy. Wish it were different.
Businesses are back to buying only “Need to Have” equipment as Section 179 Deduction has remained at $25K instead of the higher thresholds ($250K+) that spur business investment.
I work at a financial institution and let me tell you, high yield is toast man. All I’m hoping for is an irrational exuberance Chase in equities before the shoe drops
If somehow they could levitate Crude to $50+, many of the energy names that are on the ropes would have some breathing room.
Isn’t that opposite to the purpose of Saudi?
I’m not convinced the Saudis have the same impact in oil markets as in decades past. At some point in time it might be beneficial to find ways to help the remaining survivors instead of destroying all the stakeholders globally. The pendulum has clearly swung in our favor as far as energy supplies so we are no longer held hostage to OPEC”s whims.
No catalyst for that tho. Huge oversupply such a tough barrier for oil bulls
The oil algo is cute, but unimaginative. Spike has commenced. $8.05 is my first target. If hit, I will have added to my UWTI position at 7.25. This is just a hedge against my 1% short position in oil.
My clue for the spike and the reason for trimming SCO was that USO was leading the oil future price down in the morning. Sets up the best r/r. Now I want a 100 million share day in USO with USO up about 15% from its low. That would tell me that pressure has been reduced in the shorts.
My UWTI buy stop was gobbled up at 7.31, .04 cents below the last spike; then scampered like a scared bitch back to 7.18. That tells me there’s not a lot of shorts covering at that level. I immediately bot back what I trimmed in SCO at 98.75. Still could squeeze, but from here I do not want to be too long my hedge.
Why would you be long a double-leveraged (decaying) short instrument and hedging with a triple-leveraged (also decaying) long position?
Honest question. You just in this for a pretty short-term move?
Correct gapfiller. I only hold leveraged ETFs if the trend is in my favor SCO. Using UWTI for a quick check back to 42.50. I will cut SCO when the uptrend is no longer valid. Sometimes that occurs even when the fundamentals haven’t revealed themselves.
I commented late Friday afternoon about how it is difficult not to like some of the prices after two days of relentless selling.
Guessing not many folks are fully invested which makes the pain trade higher as the performance chasers will have to engage at higher prices should the market continue to defy gravity and the list of “what should happen” fails to materialize for the bears.
Leaning towards the bull side until Crude convinces me otherwise.
You getting into participation mode yet?
Soon rabbit, soon. Liking NFLX NVDA & select Biotech plus lots of the beaten down energy names you discussed a few weeks back.
Waiting for the wheels to fall off this market is no different than waiting for the wheels to fall off of Tom Brady. Can’t keep the good stocks down and Tom Brady is going out like Elway.
Hahaha … you mean Peyton Manning is going out like Elway don’t you? Brady is only suffering now cuz his OL is broken … they will be back and Tom will be breaking records long past Peyton’s game ball/benching… LOL!!!
Bought AAPL $120 Dec calls for the kill…
this isn’t bullish action….yet. Looks very much like a bearish wedge on smaller time frame. I will be interested this afternoon to see what unfolds.
you still in TLT?
no, out of all my bond trades, it never panned out but made a small gain. I’m actually looking to get in the TBT for a long term hold now.
Like TBT here. Rates want higher — institutional rotation out of fixed income into equities could explain the “invisible hand” that continues to buoy share prices.
Yup. +1
I like it when you are on my side Chiefton. Much respect.
I agree, neither bullish or bearish. Tie breaker goes to the TICK, and IMO, the chart posted on the RUT. FANG waking up too.
Apparently no one on Wall Street has ever been to Osteria. One of my all-time favorite restaurants. I wonder if this is a buyable flush in $URBN because the idea is just so stupid on its face?
also the most crowded trade going right now is long US dollars. I’m keeping a close eye on the euro to get long for a trade…..and the metals.
Is TWTR hated as much here as Crude was at $38 / Barrel?
EEM has been the leader IMO. When it sells off, our upside has generally been limited. When it trades higher, we tend to trade higher. Simply anecdotal.
Yeah, when it leads, SPY follows.
With the added benefit of very cheap premium as OA alluded to previously
No doubt.
And so the question is: Can TNA weather a short term bounce in crude? Answer still being decided at 1:36pm. Neither Crude or TNA wants to make the first move!!!!