Thursday
January 8 2015
1-855-RWT-0008
Prepared by the good people at Random Walk, LLC.
Great Morning !
Closing Prices From Yesterday
Today’s Number(s)
Yesterday
And along came a rainbow….
The markets were up for the first session of the year. Along for the ride, actually driving the vehicle, was oil closing up over $0.70. The Fed also released its minutes for the month changing its stance a little.
The Fed
The Fed released a statement saying that they no longer will be inaccessibly announcing when they intend to change interest rates, or even it will be done at a Fed meeting. They alluded to no rate change until at least April (three months away).
Lastly, Yellen mentioned that the fall in oil prices was a GOOD THING. Should I be concerned that the Fed agrees with me? Worse yet, should I be thinking they are reading my rants about how low oil prices are a good thing?
TODAY
Let me preface by saying that this is still the first week of January, and I do not get over my skis this early in the year. Having said that…..
I am still concerned about oil prices. Yesterday we were up 0.70 ish cents. In after hours trading (around midnight eastern) oil is up another 0.48. This after hours rally has helped fuel a run higher in the E-minis of $14, which equates to 125 Dow points.
BUT
We may not be done with oil selling. This does NOT feel like a big bounce off the bottom in oil. This feels more like short market participants taking profits before a bounce comes. Tuesday oil was down $2.50. Every day oil falls at least $1, and >$2 is not uncommon. A $0.70 increase after falling 50% does not feel, indicate, smell like, look like we hit a bottom.
This could be a resting area of oil for a couple of days before the next shoe falls. If that were to happen one of two things will happen. The markets could fall with oil, as they have been these last few weeks. Or, the market can put on its big boy pants and realize falling oil is not bad.
We will see. This is still the first week of January.
POT is held each Wednesday night at 7:00pm eastern.
A busy POT class last night
NEXT WEEK: Choosing the right hedge to an existing vertical spread.
Contract the office at 1- 855 – RWT – 0008 for more details.
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