On the first day of this trading week (yesterday was a holiday in the U.S. and the markets were closed) the broad stock market started out with a strong gain but then lost most of that profit as the day wore on. The DOW closed the day with a modest 27 point gain and the the S&P 500 closed with only a 1 point gain. All three market indices (DOW, S&P 500, NASDAQ) remained above their lows from Friday which means those lows could be the medium-term cycle bottom as they happened within last week's reversal zone. We are now technically out of that reversal zone so if these indices start to move below those Friday lows then we may see that medium-term bottom form in the first half of February instead. We still don't have a strong technical signal to buy so I'm remaining on the sidelines for now. Things look pretty bearish at the moment, but markets can suddenly reverse at bearish (and bullish) extremes.
Our entry point for crude oil this morning was around $29.20. Prices dropped further today, but the U.S. market closed above our $28.30 stop loss point so we are still long. Crude is very oversold and there is still a good chance of prices reversing here. Nevertheless, we will want to bail out of this trade if tomorrow's price continues to fall and closes below our stop loss. Traders on the overnight market may already be stopped out. If prices continue to move lower we may have to wait until February for the final cycle bottom. Holding my long position in crude oil for now.