Category Archives: Energy

Energy Again

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I believe there’s an old saying about how it’s better to be lucky than smart. I’m seeing an example of that today, since I had been short Alere (ALR), and I closed it at a nice profit last Thursday. I see this morning that it’s up nearly 50% due to a takeover. That’s a bullet I’m glad I dodged. Sheesh!

It seems that the fantasy world of Kuroda (“negative interest rates will surely bring prosperity to the people”) has been shoved aside once more by reality from China (“down, down, down goes the economy”) and I’m seeing a lot of red that was annoying absent on Friday. Let’s hope it stays that way, with crude, once again, leading the way lower. Here’s the failed breakout:

0201-cl

A Break in Logic

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Comment-cleaner time, and something to get off my chest……..

The “logic” of the market these days seems to be along these lines:

  1. If the price of crude oil is going up………..
  2. Then that must mean demand is strengthening………..
  3. Which implies that the economy as a whole is strengthening…………
  4. Which means that companies will have more earnings………..
  5. Which will lead to higher stock prices, so I better buy stocks RIGHT NOW

Ahem. Folks: the reason crude oil is going up is because there’s chatter from producing countries about artificially holding down the supply. That’s it. End of story.

So my request of the people of earth is: please stop being morons.

Thank you.

P.S. I came into the day really short and have only been aggressively adding to my shorts.

Bold Numbers

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Apologies for the very late post today. I had a morning appointment that overran badly, and it’s slower work getting charts done after the markets open and I’m then trading as well as charting.

I mentioned on twitter last night after the close that the bulls narrowly managed to avoid a 5dma three day rule breakdown with a target at a retest of the lows. There was more downside overnight that reached my ideal target on ES at a retest of the 1850 area and ES then reversed back up hard there. There is a strange myth that globex highs and lows always need to be retested soon after. I’ve been watching that for a while and have seen little evidence to support this, and there’s no need to see that here.

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