Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Four Hour Check-In

Published 02/03/2020, 03:34 PM
Updated 07/09/2023, 06:31 AM
CL
-
USZ24
-
KBE
-

welcome to a new week, and a new month. If I was going to summarize my entire disposition toward my portfolio, it would be “Probably going to suffer a bit, but generally holding fast.” In other words, January was fantastic, particularly that last day, but the hundreds of billions of dollars of free “money” from central banks that have been announced will probably be able to prop things up for a bounce.

Having said that, let’s stroll through a few charts based on four-hour bars. That gives us a somewhat close-up view while still providing some medium-time perspective.

Let’s start off with crude oil. What is comic about this is that the moment Qasem Soleimani’s death was announced, everyone agreed crude oil was going to rip to triple digits (see red circle). That was, of course, the precise moment when shorting everything that had anything to do with the word “oil” was the right move. One of the true great contrarian moments in market history. It has done nothing but plunge since the missile attack.

Crude Oil

My big success story in January was bonds, on which I was bullish. The breakout, circled, preceded a strong move, but I daresay there’s plenty of room for backing and filling. I am still long-term bullish on this, and patience may well be rewarded; the closer it gets beaten back to its trendline (which now represents support), the more enticing an opportunity it would be.

U.S. 30 Year T-Bond Futures

What’s key is the lows we saw in January for equities. In other words, time and again – more times than I care to remember – we’ve had a bit of a dip based on something or another (this time, of course, the virus), only to be followed by a new round of lifetime highs and endless intervention. It’s more than likely to happen again. But if it doesn’t, that’ll be a huge deal, because it means that the hundreds of billions announced over the past few days from the central banks will clearly not be working as intended.

Nasdaq 100

Lastly, the failure of the bank sector last month was key. I watch KBE almost as closely as I do the ES. Yes, a bounce, perhaps even a big bounce, may be forthcoming (“We cured the virus! Honest, this time!”) But I’m banking on it being a good setup for new shorts.

SPDR S&P Bank ETF

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.