Indexes Hit Resistance and Back Off, Are We Heading Down Again?

Today’s market

Saudi Arabia pretty much came out of their sands dunes today and just belly laughed at the notion of a freeze, or production cut in crude oil. They are perfectly content in letting it run to $20 just to  “see what happens”.  Its a high stakes poker game and they feel like they will win in the end.  This from a country that may be out of water in ten years and may tee up almost $700 million in equities for sale this year just to pay the bills.  Wait until they start selling our treasuries to raise cash. Speaking of which, their “treasury” is starting to hurt for cash right now because of cheap oil.  When is the ARAMCO spinoff?

Anyway, crude sold off on all this drama, about 6%. My feeling is that it will go down and test the lows again, if that happens then the stock market may do so as well.  The only thing that would get me bullish on oil right now is if they drained and blocked the Straits of Hormuz.

I wanted to be short crude via SCO yesterday, but like an idiot I froze and decided to wait. It ripped today, so I hope I get another chance.

Today wasn’t necessarily a very bad day, after all we have been up for days, but many indexes, etf’s and stocks that I watch like a peregrine falcon hit resistance levels and died a fast death today.

I was pretty much a bystander during this rally, my idea was to be patient and wait for some things I watch to hit some levels where I may want to short again. It was a lot of short covering that took this market up, nothing based on any improvement in the macro picture. I don’t know if I will be right, but I have to go with my plan, my technicals and my strategy. Right now short feels right again.

As I told you in the beginning of the year, I think this is a year where you sell or short rallies, and I don’t expect much at all from this market this year to the upside, just a lot of range trading.

I added some new stocks today: all short exposures

Long ERY ( etf that is short energy stocks XLE)

Long FAZ ( etf that is short financias XLF)

Short BOKF (bank stock with energy exposure)

Long LABD ( short biotech stocks)

I don’t want to get too excited about bearish action after one day, but there aren’t any longs I really like here at all.

Here are a few potential short ideas that I have my eye on:


Feel free to email anytime with questions , comments or feedback at [email protected]

See you in the morning.



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