I hope you all had a restful extended weekend. The battle resumes tomorrow and although the U.S. market was closed today, futures and other markets traded normally.
Here is a snapshot of today’s action.
Crude managed a muted rally to almost 31, but gave up the goose to close at just under 30 at 29.98. Brent crude close at 28.61.
I believe China reports GDP tonight, but last week China’s Premier telegraphed that they grew at 7% last year, so unless he was at an opium den when he said this, there shouldn’t be any big surprise.
The Stoxx Europe 600 now sits on losses of roughly 10% for the year to date, while the Dow Jones is in correction territory, having fallen more than 10% from its recent high in November. The Shanghai Composite Index is down more than 17% for the year. Don’t get me started on individual stocks and etf’s because it’s much worse on that front.
Takeaway
If crude and China can settle down, we should be able to muster an extreme oversold rally, perhaps early this week. If not, then expect lower prices. We have some excellent cushions in existing short positions, so I may hang on a little longer, but there is a chance I will cover. I will let you know either way.
I added in a small position in TNA (long Russell 2000) because it is the most oversold of all the indexes.
See you in the morning.
Joe