Let's start today at yesterday's SPX commentary, shall we?
We've been hovering 1925 +/- 20 since last Wednesday, so it's anyone's game at this point. I'm very confident we're entering a bear market, but will it fall straight down from here? I'm still not certain the leg up is over until we close Monday's gap up from Friday and re-enter the sub 1900's range. I suspect a few more strange up and down days in this range might be it. I feel like chasing is a loss, so I recommend cash.
No man's land just stole your sandwich if you were chasing a short today in just about anything, huh? So I bet you are all sitting around scratching your heads right, you were burned trying to chase a long on Tuesday, and burned again trying to short in Wednesday. I apologize to anyone who didn't heed the "being cash might be a good option for you" warning yesterday. Because if you didn't you probably feel like the worst trader alive right now?
Look man, here's some aloe for the burn--focus. You and EVERY OTHER TRADER OUT THERE. Hopefully if you stick around here your technique will sharpen and you'll learn to not get caught up in the excitement of a one day thing and be the last guy in line throwing your money at it. Trust me when I say that no man's land is not the place for you, it's the place for algo's to fight each other with trillions of dollars that you do not have. Again don't be that guy thinking you know something they who think in nanoseconds don't. Just watch this TED talk if you want a little more info about your future robot overlords. And just take from it that you just don't want to be "that guy" trying to beat it.
So ladies and gentlemen get your crayons and your ruler and lets learn how to be someone much better than...that guy. See...I am really good at copying and pasting shit that happened from the past and applying it today being the world's greatest trader and predicting the future, as you can so plainly see. The SPX is still trading on an absolutely predictable path--thank you again VIX. But unless you are a seasoned pro why even bother? This kind of trade is hard right here. So please for the sake of your retirement accounts, let the robots do their thing before you subscribe to anyone's crazy theories (or your own) about what you or they think will and won't happen. You don't know, I don't know, and even the Crayola gods might not know. Because if you are trading here you are a certainly a glutton for punishment.
SPX
On that note I am somewhat of a glutton for punishment. I saw SPX fall to 1890, a price target I've been telling people to watch since 2/19/2016, and again today with everyone in chat shouting that number as early at 7:00am EST like there was a trophy for saying it the most.
There was no trophy...
But when that number bounced and we filled the 1920 gap I loaded up on some SPXL because it's a high risk trade but with high return, and I have my stop losses in place. And what do you know, that action of clearing the gap down was all it took to send the intraday bears retreating for the hills. Now since it's still no man's land, I only took a small position but at least I'm in really low so tomorrow if it's a runaway past the resistance I am costed in lower than the open for the day because of today, which as a day trader...cost averaging into a possible gap up to make sure your entry price is lower than the day's open is like a parachute for your parachute. You ain't gonna die with that setup.
WTI
And I know every one of you thought today's crude build was bearish, which again I need an installment here explaining these reports, but as I said before there is a lot that goes into the pricing of crude that's not just "supply." There is supply against demand, there is time of year, there is time of month, there is oversold and overbought on speculative instruments like DWTI/UWTI, there are options put into the USO and we all watch the OVX and react to that as traders too... not to mention the Saudi's being Saudi and inflating futures prices with fancy words.
Oh and those reports also show the thing that people like you and me actually buy. Gasoline and Kerosene (not directly the latter...but you fly, and that fuels your plane). And then distillates (heating oil and diesel for transportation of the things you buy everywhere else)
Crude oil inventories (previous / weekly change): 2.1 M barrels 3.5 M barrels
Gasoline (previous / weekly change): 3.0 M barrels -2.2 M barrels
Distillates (previous / weekly change): 1.4 M barrels -1.7 M barrels
And again I said that you have to look at how traders respond. They had an awful API report in a build, and a much more tolerable EIA report which showed things to be not as bearish as they were presumed yesterday. Distillate and gasoline inventories went down which say that even in this bad fundamental environment things are proceeding along pretty much like that always do... demand for products isn't necessarily decreasing, so it was a report that wasn't bearish enough to sustain yesterday's short, so traders covered.
It's still no man's land, it's still a brutal trade; and while I may be a glutton for punishment, I'm definitely not stupid with my money. I didn't chase, I didn't lose. And in my book that's a win...
Hope that sheds a little light on the dark stuff. It's still looking bad out there, so peck at your trades and take profits whenever you can. Don't get your hopes up, it will all be over soon and you can get back to just setting it and forgetting it (whichever way that ends up being). But when it happens, you'll know. Feel free to post any questions here or PM me directly and I'll help if I can. And as always
Happy Trading!
Submitted February 24, 2016 at 06:40PM by gabriel87120 http://ift.tt/1p5VjWb
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