I woke up this morning to find the DOW down at least 132 points, after morning prayers and some houswork, now I am sitting here with disbelief that it is ending just 24 points below yesterday’s close. I thought I was imagining things. But double checking, the charts and the news articles, it has indeed climbed up more than 100 points at the last hour. What a race!
I thought the market drop was going to happen before EU summit provides any conclusion, but I guess there is anticipation of “good news” from the other side of the Atlantic. Now we can all say, this EU problem is not going to go away for years, but you know, at least, steps are being taken. Also, remember, governments want stability, prosperity, my belief is that they will come up with “something positive” for the financial markets to recover. Now, I am not overly optimistic but I believe they are moving in the right direction, I will be looking for an opportunity to take a long position. STO also moved lower yesterday despite oil moving up, then oil moved down today, so potentially a further softening of prices can be seen. We are hovering at 52 week lows, so the price level is kinda getting me excited – thinking about the sanctions over Iran’s nuclear program that will kick in by 1 July and so that could affect oil prices, and Iranian response (that I expect would rattle the market!). So for those who have a positive outlook about the market (e.g. for oil), you can size positions conservatively at first and when the trend up is confirmed, add more.
Now, I would advise everyone to be careful in doing their trades. Check everything! I provide a checklist of market, technical, fundamental, psychological checks in my 4-part, 15 step trading process in my book “High Heeled Traders” available here!