ES’ levitation off its election night lows has drawn very little attention. But, as we discussed yesterday, it was a stark reminder of the ability and willingness of the central planners to do “whatever it takes” to keep stocks on track.
Frequently, though, these stick saves are more than was necessary, and they’re left with the question of how to back fill a rally without panicking the masses. Such is the situation this week.
continued for members…
A backtest of the falling white channel is still in order. I still expect it to wait until the SMA10 has cleared the channel, which is some distance off: 2145ish versus its current 2131.40. So, we’ll probably continue to get sideways chop for at least a few days. I’d remain short.
Note that USDJPY continues to climb, but is running into plenty of overhead resistance between the falling white channel midline and the gray .786.
While, CL has pushed back above its SMA200 in a fairly well-defined falling channel that levels things out following the steep initial wave down. If it’s going to support stocks, we need to see a breakout here, preferably back up to at least the red midline (47.75.)
VIX continues to support our downside case, though a dip below support wouldn’t take much effort.
UPDATE: 9:45 AM
For anyone who isn’t already short, 2168.12 is as good a place as any to jump in. The initial pop is fading on USDJPY’s apparent loss of momentum and CL’s (so far) failure to break out.
UPDATE: 10:25 AM
It looks like a breakout on SPX, but not on ES. I’d stick with ES’ narrative and hold short for now. I still see this as buying time.
UPDATE: 3:50 PM
This is probably as far as I’ve let my stops stretch in quite a while. Everything’s on the brink of breaking higher. I’ll either look pretty smart tomorrow or have egg all over my face. If you can’t take the risk, eat the 10 points here. But, I still expect a nice sell off, and it’s looking more and more like tomorrow. The API inventory report comes out after the close, so we’ll find out in a hurry if CL’s 6% ramp will hold. 
Interesting that CL rose precisely to its next major channel resistance — especially in light of the political goings on today.
http://www.zerohedge.com/news/2016-11-15/saudi-arabia-warns-trump-not-block-oil-imports
Comments
2 responses to “What Goes Up…”
I am getting emotional when CL spiked more than 4% today, although I don’t have any investment related to CL now.
A year ago, CL had similar behavior with the uptrend and I invested heavily in oil related stocks with the perception that CL would bounce. That caused heavy losses in a few weeks.
History may repeat itself.
I am anxious to see what happens to CL this time.
Very strong, opposing parties in the oil trade. Oil industry, oil producing nations, market manipulators, etc. all trying to prop it up. And, central banks guiding it slowly lower so that its inflationary effects aren’t so apparent. It’s THE battleground over the next few months.