This is what I call the European chicken little gap up. All the Europeans afraid of another terror incident over the weekend hedged by shorting futures and unwound the hedge when there was no incident. It sounds silly, but these fund managers just watch news and charts all day, and if we close near the lows and there was bad news that day, they tend to crawl up into a shell, a chicken egg shell, and act like scarecrows.
Anyway, the Americans are coming in to show what the real market is, and bringing down the terror gap up, as the futures gap up shrinks by the minute.
There is clearly a different feel to this market. It is being pulled from two sides, on the one side, the fund managers acting like it is still 2014 and buying with reckless abandon, and the other side, the natural force of a weak stock buyback market that wants to go down due to weakening global economies and lackluster earnings. In the end, the natural force will win out, but not without a fight from the johnny come lately fund managers.
Oil is getting crushed again, and it is clear as night and day to me that it is not just supply driven, but a big chunk of this oil weakness is weak demand. China demand for commodities is dropping off a steep slope and it is something to keep an eye on. Unless the PBOC comes guns blazing, there will be a financial crisis in China, just as retail is all abuzz over there about stocks again.
No good feel for the day, I will be looking to buy if we can a little flush lower, this week should eventually go back higher after the V bottom last week.
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