It's only a little pullback – so far.
As you can see from Doug Short's S&P chart, we're having a modest pullback on increasing volume as things return to "normal" following the holidays. You can see why we elected to sit out the past two weeks – already the gains have reversed and we're right back to where we were just before Christmas, where we took the opportunity to get to CASH!!!
We've deployed that cash in a very profitable fashion with some great short-term plays, including last Thursday's short on oil. In yesterday's morning Alert to Members, which I also tweeted out at 7:30 am, my trade idea to short oil at $94.50 yeilded a nice $1,250 gain on the day as oil bottomed out at $93.20 with a stop out at $93.25. Those Alerts are usually sent out to our Voyeur and higher subscription levels. Though, for all of our Trade Alerts, you need a Premium Membership, of course.
Once the markets opened, my first idea for a Futures trade in Member Chat was shorting the Russell (/TF) at 1,160 and the Dow (/YM) at 16,450. The Russell fell to 1,142 for a $1,800 per contract gain and the Dow hit 16,340, up $550 per contract. When you can make quick moves like that off a cash position, what's the rush to get "back into" the market?
We haven't re-opened our USO short or SCO long positions as we're hoping for a run back to $95 on oil inventories (tomorrow, 10:30) where we can make a contrary play BUT, if oil hits $94.50 and fails again, we will take that short with tight stops. Meanwhile, the absense of short-term shorts leaves us long-term long with our Dec 2019 contract hedges - so let's hear it for the manipulators today!
Dave Fry's Transport chart shows us a little break-down in that sector, despite FDX's $2Bn share buy-back announcement. Dow theorists watch the Transports carefully, so we should too but part of this may be attributable to the storm conditions in the Northeast – so we're not going to read too much into it until/unless next week continues the trend…
