Stocks Getting ‘Rick Rolled’ After Oil Inventory

This morning has all the makings of a pain trade. Cash on the sidelines had to wonder if they missed out by waiting for a retest of the lows. Sellers from yesterday had to take some heat. Now that we pushed just high enough to suck in some chasing bulls, sellers are responding.

Several momentum darlings were not participating this morning. Shares of Tesla haven’t been the same since Elon took the stage last week and presented his latest and greatest. GoPro continues to be a heartbreaker to any hopeful knife catcher. Tech overall has been a mixed bag.

The big winner so far this week is basic materials. Therefore it is no surprise that the volatility in oil post the 10:30am inventory stats is knocking the overall market around. The clearest way to monitor this action, however, is to keep an eye on the USD/JPY. This remains the key contextual piece. It is wound tight heading into Wednesday afternoon.

Keep it simple, a strong move above 120.25 is contextually bullish and a strong move below 119.75 bearish for stocks.