Somehow we ended up bullish yesterday.
I already sent out a morning Alert to Members reiterating a buy on oil futures at $72 (already hit our first target at $72.50, which now becomes our stop line) and we took a longer-term bullish play on USO yesterday as oil came back down from $75. We got out of our day-trades right at the top in the afternoon so that dip into the close became just another buying opportunity for us where things got so crazy that we actually bought OIH at $91.04 as that is just RIDICULOUS. Of course we leveraged it with an option play for our Members but people ask for stock picks, so there’s one I like a whole lot!
We were looking for the sell-off as I had put up a chart of the major indexes for Members at 12:27 that indicated a down-trending channel and I predicted a re-test of last Wednesday’s lows "tomorrow," which is now today, of course and the indexes dove straight for our 1% line into the close so we will be thrilled if we just hold it together here and form a proper base to move up from.
That 1% line also happens to be the -5% line for the year to date so we expect at least a weak bounce off that level (which held nicely in early Feb) and is up 5% from last November’s sell-off. The most disturbing things we need to watch is the incredible weakness of the NYSE, which is below it’s lows of last November and dangerously close to a major breakdown at 6,500. That and copper below $3 are going to be our major indicators of BIG TROUBLE. SOX 350 was a very disappointing loss yesterday and we need to hold the 200 DMA at 340 or we are DOOMED.
So, other than that, we’re very enthusiastic about our prospects going forward – not so much because things are great over here but because things are so very, very scary everywhere else that US equities seem safe by comparison.
Japan’s Prime Minister resigned last night after just 8 months in office and the Yen is actually lower now (91.9) than it was at 3am (91.6) blowing our "sure thing" play in Forex for the first time in ages.