Sunday, December 21, 2014

Dec 21 - Big bounce in indexes, potential oil rally

As expected per this Monday post and Tuesday post, the indexes rallied strong and are heading into seasonally favorable period.  This could be exaggerated further by fund managers adding onto their already strong returns for the year.  QQQ looks ready to break previous highs and challenge its upper trendline by January.

USO printed some huge volume which is probably a short term bottom or in the stages of creating one.  With $WTIC at around $55, that is fairly close to an inflation adjusted price of $48 at the 2009 bottom which was around $40.  If oil falls to $45-50, I would be looking at making some long term bets.

GLD looking fairly wobbly and hasn't bounced like I had expected.  It is managing to move up but in a very wobbly manner and with the gold miners showing major negative divergence, it could be telling us something.

HYG although bouncing strongly, continues to display strong negative divergence to SPY.  Something to think about if we enter a deeper correction down the line.


Declan Fallon said...

Capitulation volume in $USO. Given I'm long $KMI I'll happily take (a long awaited) move back to Energy stocks.

Greenlander said...

Yeh could happen soon. I'm waiting for a retest of support/ more churn but who knows we just might move up from here.

May 15 - Closed out IWM puts for +120% and picked up DAL and HD Jun calls

I'm going to let the market do its thing this week and probably stay away from new positions until Friday unless something very good pop...