Slope of Hope Blog Posts
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I genuinely try to avoid talking about "crucial junctures" any more frequently than I must, but we're at one now. Well, perhaps crucial is too strong a word, but I think tomorrow is a very important day for the short-term direction of the market. There's a big retail report coming out before the open, and a number of big firms (including Intel, after hours) are reporting earnings. So the Q2 earnings season will begin in earnest.
Today wasn't at all a good day for the bears. With the Dow up 185 points (having been down early in the trading day), and the $BKX bank index up over 6.5%, a lot of my short positions took it on the chin. My one really big position, my OIH short, I was able to exit at a decent profit, and I got into a couple of TBT longs that were good for me. But otherwise the day pretty much stunk.
Glancing at the FAZ and SKF below, you can see how July's nice progression of gains got nuked in one session, and in both cases we're sitting right on support. I got stopped out of both of these immediately at the opening bell (thank goodness).
The simple fact is that we haven't had as big an upward move on the /ES since May. If tomorrow is another strong day, it's probably back to the horrible Waiting Game, as both sides continue to wrangle each other. I had thought we had just about gotten the upper hand on this market, but today puts that scenario at-risk.
Sorry to be OIH-obsessed, but I am re-entering.
I actually started off great this morning with OIH; it zoomed up with a $7k profit, but it withered away to $2k when I got out. Oh, well. It's still a profit. So I am re-entering now at a much more favorable price than earlier today.
It's a drag putting up with these one-hit wonders (today's, of course, is "Buy Goldman Sachs" – – one woman's opinion on one company), but it doesn't fundamentally change my view on the market's direction in the coming weeks.
I started backing off my wild-eyed short-term bearishness on Friday, and I've continued to do so today. Whatever bounce we're going to get might be confined to today, but today's reversal has been meaningful. I went up up 1% to down 1% in the span of about 90 minutes.
For the moment, one good opportunity I see is what I believe will be a rise in interest rates. I think IEF is going to go down and TBT is going to go up. I've gone long TBT. Below is IEF, which I wasn't able to find to short, but it's worth considering if you can locate any.