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The bulls put in a strong day yesterday and almost tested triangle resistance. The RSI mirror triangles on the daily chart broke up and I would normally now expect to see a thrust up from the triangle to follow the RSI triangle breaks. However SPX has not yet convincingly broken back over the daily middle band, or broken up from the triangle, or broken the last significant high at 2114.24. SPX also needs to establish some support and that is the main issue for today. SPX daily chart:
OK, it’s really early, so I’m not going to bother researching. I’ll just ask instead.
On Monday, the market exploded higher. Crude oil and related companies in particular vomited particularly energetically, with some stocks zipping 40%, 50%, or even more on the day. This led to a fairly miserable session for your humble narrator (whom, I think we can all agree, really only deserves pleasant, profitable sessions. I mean, he’s a nice guy and all).
The reason for this mega-rally? Simple: because the completely fake Chinese economy is falling to pieces, there was hope that the Chinese government would intervene. Since we live in totally inauthentic markets where central bank intervention is all that matters anymore (well, that, plus really retarded corporate names like “Alphabet”) bulls around the world bid up prices like mad.
Well, it happened. China intervened. They took action.
So now, as I stand here, with my dogs staring at me waiting for their walk, I ask you this sincere question: why are equities crumbling, and why in particular has crude oil lost 100% of its utterly baseless gains from yesterday? I’d really like to know. Because the world is pushing me to the point where very little makes sense anymore.
I’m not going to sugarcoat it: today sucked out loud for me. I actually got stopped out of very few positions, because the “big picture” tops are still cleanly in place, but the huge relief rally we got definitely took a hatchet to my portfolio profits. Since I’m always happy to share success stories, I thought I should at least be as eager to share something less gleeful. So there you have it.
Having said that, I have been asking myself: how big is this relief rally (which I think is largely going to be driven by the relief-in-commodities rally) going to be? Traders more nimble than yours truly definitely benefited from the bounce of some horribly-oversold issues, such as Magnum Resources, which jumped 70% today alone (!)
By Biiwii
See: Oil collapse couldn’t come at a worse time for industry
See: 2007, when everyone was convinced of ‘Peak Oil’ and there were websites named ‘Peak Oil’, ‘Oil Drum’, etc. constantly reinforcing the mania.
I remember being away on business one day in 2007, with nothing better to do in my hotel room than watch the congressional debates about ‘peak oil’ and what to do about the evil speculators that were driving prices up. I enjoy watching a good mania as much as the next guy. I realized that what we were seeing was ‘Peak Hysteria’ with respect to this phenomenon. I thought, ‘Yup, Prechter’s right’.
