We saw some selling today as anticipated. Our take on today’s trading action
We saw a slight pullback in stocks today with the S&P 500 index declining -0.34% and the Nasdaq Composite down -0.24% at the end of the day. We had mentioned yesterday that we expected the markets to head into resistance. We thought we would touch the area around 1,694 before pulling back but we only got as high as 1,689.97. Close enough for government work.
The S&P 500 index will likely pullback and retest 1,680 tomorrow but that should allow for a move higher. The index may even decline to the 1,670 area but that still means this rally is intact.
Boy, were we wrong on the price of gold and we have the scars to prove it. We had expected gold to move higher as stocks sold off and while we got one right we got the other completely wrong. Where do we go from here? We should get filled in around a level of $127.50 on GLD tomorrow but the up-trend is broken. What now remains to be seen is the extent of the pullback. We could likely retest the breakout level but tomorrow’s price action will tell us whether that is in the cards.
We had this one pegged. Oil continues to move higher as evidenced by this chart of the USO, telling us that the fear trade is not over quite yet. USO also closed above $38.5 which is a good support level. However, oil is likely to break through at the bottom of the wedge.
Current PositionsThis content is for members only.
Potential OpportunitiesThis content is for members only.
More selling should be on the menu for tomorrow with a likely target of 1,680 for the SPX and a secondary target of 1,670. It does not mean that the rally is over but rather that we are due for a pullback after being up 90 points since the end of August.