Wednesday, January 13, 2016

Don't Touch Crude

I see many simpleton counter trend traders/knife catchers think this crude oil move is overdone and that we are near a bottom.  Maybe they are right, but it would be one of the very few times when the retail crowd and its massive inflows into oil ETFs outsmarted the big boys feeding them that oil.  The ETF flow data still scream that we are going to continue lower or just stagnate at these lower levels for a long time.

It doesn't mean I want to short crude here, because we could have one of those big one-two day short squeeze rallies.  But if you see one of those short squeeze rallies, they are very shortable, even at these low levels.

Looking at the trading in the indices today, it looks like we are selling off again from a gap up.  One of these days, these suckers at the US open will go on a buyer's strike and there will be real pain then.  If you don't short at the open or during the European session, you aren't able to short at the day's highs.  When the real money comes to show up, the overnight buyers disappear.

It is a sickly market, and we will have to go to SPX 1870-1880 to really flush out those clinging to V bottom hopes here.  Still leaning bearish till then.

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