Based on political events over the weekend, oil blasted higher immediately on Sunday, and it looked like it was going to be a moon shot (red circle) until it ran out of proverbial gas and has now settled into a gain of about 1%.
Minute bars can lead one to misleading conclusions, however, since the seemingly explosive move last night was just a ripple in the ocean, when you consider the amount of overhead price supply there is over the longer haul.
Oil’s strength depressed equity prices for most overnight trading, but by now (just before the open), stock futures are massively unchanged. The /ES has been hammering out what might be a basing pattern for its next bounce-back launch higher.
If it accomplishes this, the target will be the exceptionally important defining line of the pattern looming above. This, I believe, would be the time to get seriously short.
The /NQ, likewise, has miles to go before things are truly enticing again.
My self-flagellation I expressed in weekend posts was justified, since being even lighter than I am now (36% cash) would be desirable, plus there’s at least one totally premature and idiotic position (ahem, NFLX) that I’m going to dump straightaway. Let’s just say the selloff went a bit to my head!
