UPDATE on the BROAD STOCK MARKET and CRUDE OIL (4:30 pm EDST)
It looks like yesterday's Fed rate cut combined with Powell's hawkish press conference along with today's news of more tariffs on China from President Trump has created enormous volatility in all financial markets. Fortunately, we are on the sidelines (except for crude - see below) and can objectively analyze any wild market gyrations as we abstain from trading before they settle down.
The broad stock market started off the day with a strong rally until the news of Trump's tariffs in the afternoon stopped the rally in its tracks and sent it straight down to close with a 280 point loss in the DOW. The DOW is now at our target area for a sub-cycle correction (26,600), but it is closing with a bearish signal. I am not comfortable going long in this volatile environment. We will be in a reversal zone for all markets through Aug. 14 so there is plenty of time for a bottom to form. Let's wait and see how the market closes this week. Still on the sidelines of the broad stock market.
Crude oil seemed to ignore the broad stock market's plunge yesterday, but today it decided to take its cue from the equity plunge as prices dropped dramatically down to $53.59 intraday (Sept, contract chart) before snapping back a bit and closing at $54.50. Our original stop loss for our long position was (is) a close below $54 so we are still long. We went long on July 22 with the idea that the low of $55.2 on July 19 was a sub-cycle low, but it's possible it wasn't and that today's low is the sub-cycle bottom. If so, prices should rally from here. Let's stay long unless prices break and close below $54.
It looks like yesterday's Fed rate cut combined with Powell's hawkish press conference along with today's news of more tariffs on China from President Trump has created enormous volatility in all financial markets. Fortunately, we are on the sidelines (except for crude - see below) and can objectively analyze any wild market gyrations as we abstain from trading before they settle down.
The broad stock market started off the day with a strong rally until the news of Trump's tariffs in the afternoon stopped the rally in its tracks and sent it straight down to close with a 280 point loss in the DOW. The DOW is now at our target area for a sub-cycle correction (26,600), but it is closing with a bearish signal. I am not comfortable going long in this volatile environment. We will be in a reversal zone for all markets through Aug. 14 so there is plenty of time for a bottom to form. Let's wait and see how the market closes this week. Still on the sidelines of the broad stock market.
Crude oil seemed to ignore the broad stock market's plunge yesterday, but today it decided to take its cue from the equity plunge as prices dropped dramatically down to $53.59 intraday (Sept, contract chart) before snapping back a bit and closing at $54.50. Our original stop loss for our long position was (is) a close below $54 so we are still long. We went long on July 22 with the idea that the low of $55.2 on July 19 was a sub-cycle low, but it's possible it wasn't and that today's low is the sub-cycle bottom. If so, prices should rally from here. Let's stay long unless prices break and close below $54.
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