Now I’m not sure if yesterday was the start of a new leg down but it’s a possibility. If I weren’t so invested in oil right now I would be shorting or at least hedging myself from any downward risk. Of the indices, the NYSE looks the weakest and this index should continue to act weak if oil continues to bounce back…which it should because it looks like it has been oversold. As mentioned in a previous post, the indices are reaching its 50 day moving averages. This is an important mark because if we were to break past this level on strong volume the momentum would continue for the bulls.

The S&P500 did close above the MA(50) but it hasn’t been following through the last couple days. This is a definite sign of weakness and I would be slowly getting out of long positions in these next few days. After noticing how weak the NYSE was, I decided to get out of McDonalds (MCD) at $66, and I’m glad I did. 

Sorry for the short post, but I will update you guys once I get a clearer picture of the markets. For the time being, I would suggest that you slowly pocket your gains before fully investing yourself again on either the long or short-side.    

Richard
richard[at]hedgeagainstspeculation.com

So as some of you may already know I just came back from Vegas and a golf trip. I do apologize for the lack of posts but not too much has changed since my last post.

The S&P500 has retraced back to its MA(50), or at least it’s close to its 50-day-moving-average. This took a week longer than I expected it to, but after a sequence of up and down days we’re finally there. I’m disappointed I didn’t make much during this bounce, in fact I pretty much broke even. But breaking even in this bumpy market isn’t all that bad.

So the Federal Reserve left key interest rates unchanged at 2% for the second straight meeting. This along with oil pretty much ruled the markets today and gave it a little push up. Crude plowed through the $120 support level…Bloomberg said this is a bearish sign. Bloomberg also says if it breaks the 116 level, it could fall to 100, where there is a history of consolidation. Falling to 100 wouldn’t surprise me but I think the days of oil below 100 are over. Lower oil prices should yield higher indices, but I would be careful this coming week especially as we approach the MA(50). We are in a bear rally but I would be careful to go full steam…I’m getting prepared for another leg down.

Oh and traders, if you’re interested in being a guest writer on Hedge Against Speculation send me an email

Richard
richard[at]hedgeagainstspeculation.com