Good Hump Day all. We’ve got a little upside across the major indices
so far on the morning, which is likely a welcomed event considering the
last four trading days. Whether or not it will last is the issue. And,
considering the recent increase in volatility, we’re pretty convinced
the rest of the week is going to be pivotal for the near-term market
landscape.
Provided below is the daily chart of the NASDAQ Composite we like to use so often, and as you can see yesterday we got the third close below the 3X3 DMA (blue line) in six trading days. That clearly suggests the possibility of a bigger move lower than what we’ve seen so far. However, should the index somehow manage to find its way back to last week’s high, the potential reversal signal will have been negated.
There’s no question the volatility has picked up, but how many times have we seen just these types of moves, only to have the markets continue to grind higher? At this point, we’re pretty convinced the old theme of buying the dips and selling the rips is still the better short-term strategy right now.
We suspect we’ll see another move above the 3X3 DMA before the end of the week, but what happens after that is going to be the big pivotal move, because “if” the index breaks down following another close above that 3X3 DMA without taking out a new high, the next leg down could be pretty ugly, so we’ll just have to see what happens over the next few days.
The bottom line here is we’re really not interested in overly speculating at this point until something far more technically definitive surfaces. Basically, when it comes to trading the major indices on a short-term basis, it’s a hurry up and wait scenario.
We’ve mentioned recently the fairly strong possibility of oil somehow finding its way down around $50 per barrel, or slightly lower, before it could be in a position to stage another strong leg up, and based on what we’re seeing right now, it sure looks to be the case. Provided below is a daily chart of light crude, and as you can see, a break of that long-term range to the downside would completely wash out some weak hands, and allow the commodity to finally start making a much stronger move higher.
We really don’t think it’s worth playing the move between here and there, but if you want to speculate and take that shot, SCO would be the bearish leveraged ETF vehicle to do it with, as that’s the primary bearish leveraged ETF tracking the price of oil. Furthermore, if you do decide to speculate on a move to roughly $50 per barrel, just make sure you take the profits around that level, as we’re pretty convinced oil is going higher on a long-term basis.
Lastly, we also mentioned gold would likely find its way lower following some nice profits to the long side earlier in the year. Well, that’s precisely what has happened. Provided below are two charts of GLD, a monthly and a daily. The problem we’ve got with gold right now is the monthly chart is actually suggesting a potentially problematic issue with the precious metal space on a bit of a longer-term basis. However, fundamentally we’re absolutely convinced gold is going to find much higher levels on a go-forward basis.
Provided below is the daily chart of the NASDAQ Composite we like to use so often, and as you can see yesterday we got the third close below the 3X3 DMA (blue line) in six trading days. That clearly suggests the possibility of a bigger move lower than what we’ve seen so far. However, should the index somehow manage to find its way back to last week’s high, the potential reversal signal will have been negated.
There’s no question the volatility has picked up, but how many times have we seen just these types of moves, only to have the markets continue to grind higher? At this point, we’re pretty convinced the old theme of buying the dips and selling the rips is still the better short-term strategy right now.
We suspect we’ll see another move above the 3X3 DMA before the end of the week, but what happens after that is going to be the big pivotal move, because “if” the index breaks down following another close above that 3X3 DMA without taking out a new high, the next leg down could be pretty ugly, so we’ll just have to see what happens over the next few days.
The bottom line here is we’re really not interested in overly speculating at this point until something far more technically definitive surfaces. Basically, when it comes to trading the major indices on a short-term basis, it’s a hurry up and wait scenario.
We’ve mentioned recently the fairly strong possibility of oil somehow finding its way down around $50 per barrel, or slightly lower, before it could be in a position to stage another strong leg up, and based on what we’re seeing right now, it sure looks to be the case. Provided below is a daily chart of light crude, and as you can see, a break of that long-term range to the downside would completely wash out some weak hands, and allow the commodity to finally start making a much stronger move higher.
We really don’t think it’s worth playing the move between here and there, but if you want to speculate and take that shot, SCO would be the bearish leveraged ETF vehicle to do it with, as that’s the primary bearish leveraged ETF tracking the price of oil. Furthermore, if you do decide to speculate on a move to roughly $50 per barrel, just make sure you take the profits around that level, as we’re pretty convinced oil is going higher on a long-term basis.
Lastly, we also mentioned gold would likely find its way lower following some nice profits to the long side earlier in the year. Well, that’s precisely what has happened. Provided below are two charts of GLD, a monthly and a daily. The problem we’ve got with gold right now is the monthly chart is actually suggesting a potentially problematic issue with the precious metal space on a bit of a longer-term basis. However, fundamentally we’re absolutely convinced gold is going to find much higher levels on a go-forward basis.
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