"It is foolish and wrong to mourn the men who died. Rather we should thank God that such men lived." -- General George S. Patton, Jr.
"Bear in mind why you are off on Monday." -- Your old pal.
Trader Focus
WTI crude does seem to have found a bid this morning, and has wiggled its way back above $49 a barrel. Energy stocks did not rally with oil going into the OPEC meeting, so I don't know how much you can trust the sector to bounce with the commodity this morning. If already long the space, you may be looking to add to your positions on weakness, but there does come a point where dollar cost averaging becomes quite simply an act of "throwing good money after bad". I would rather buy oil stocks with otherwise sound fundamentals when WTI trades at $47, than I would here. I could be wrong, but I think it will. I am long a few oil names, and speaking about my personal dough, so this is not more drivel from some talking head with no skin in the game.
The S&P 500 broke through the 2405 level with a certain kind of violence yesterday, a violence that left the market in a difficult spot to hold well above the 50 (2371), and 200 (2261) day simple moving averages. The index would, at least for me, look prettier if it would first test 2405 prior to moving on. That said, on a six-month chart, several common technical indicators are illustrating a market that is readily accepting more upside investment. I see that moving average convergence divergence (MACD) crossover suddenly turning bullish. I see a relative strength index (RSI) that is not yet flashing warnings about an overbought condition in the broader marketplace, but also comfortable rests in the low $60s. I also see a Chaikin Oscillator that is suddenly spiking again this week, and has not been negative in almost four weeks. Yes, we may test the local trading level. In fact, I would feel better if we did, but shorting the broad market here could leave a kid with lasting scars. If that's your game, do it synthetically, not through equities. At least that way you can control your risk.
