Oil continues to show strength and remain in its 5% consolidation pattern. A Saudi increase in production failed to bring down crude prices as their actions were either a) already baked into the cake b) were not done with enough conviction to convince anyone c) a combination of the two. Furthermore, the XLF took a massive beating during the day. Banks, brokers, and regionals were all down strongly. It surprised me that the broad market was not down more off of this action. However, I had a good idea that it would not end positively (as it was at one point) leading to a good short was when the market started going positive in the afternoon.
The Big Picture Blog (Barry Ritholtz) posted a very good chart today. As you may know the VIX spiked at or near 30 on the last three bottoms, but has failed to do so yet. He states that he thinks we have more to go based on this, that the action hasn't become capitulatory yet. I agree with him and would stay balanced/less invested overall until it starts to really spike.
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