Thursday, January 28, 2016

Oil Putting Floor on Market

We are in the hope phase of the bounce back.  With oil bouncing strongly off last week's bottom, you are getting bulls hopeful for a stabilization in oil and thus a strong recovery bounce.  As I said earlier this week, it will be easier to play this choppy uptrend off last Wednesday's bottom by buying dips along the way, and selling the rips.  Yesterday was a sell the rip and buy the dip all rolled into one day type of price action.  It defined the top and bottom end of the current range, which is ES 1910 on the top, and ES 1860 on the bottom.  The market is nearly in balance at this currently level of 1890.  

The market is very resistant to stay below 1870 for long.  The ES is like a ballon being held underwater every time you get under 1870.

Looking beyond the next few days, there will be opportunities to get long bonds and short ES/oil at good levels.  Eyeing ES 1920 and WTI 35 as short levels.  The optimism is building, and that is when you want to build your short positions so you profit on the next down move, which will come again.  After all, as I have repeated many times this month, we are not in your old BTFD market, but a STFR market.  

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