I admit, that 277 points celebration rally in the US DOW got me excited and can’t wait for Monday. That number was quite staggering and seemed to signify that the market gave the policies / agreements in the EU summit a vote of confidence. Clearly, Spain is the clear winner, just have a look at what it did for the soccer team!
So what’s next? The thing with the markets is that there could be some news springing up somewhere, which could surprise the best of us. Take the news about China manufacturing, with orders trickling in rather than accelerating (this time of the year they should be revving up the orders for Christmas – to allow the months needed for production, shipping, and get stores stocked right after halloween!) It is a bit worrying. Add to that, companies have recently been giving ”profit warnings” so I have low expectation of US company reports coming in by July 9.
However, with the sector I am trading (oil / energy), the price movement may rally on. Sanctions against Iran start July 1. Already there is tension in the air because Iran has so far been displaying its usual stubbornness and threatening aggressive action — like increasing its missile reach to Israel, and possibly hostile activities in the Persian Gulf. This is one of the toughest sanctions ever and I expect price spikes, especially at the level we are in, there is plenty of room for move up back to $100. If there’s any more to go wrong, oil supply from the North Sea is also threatened with labor strikes.
UPDATE 11:39: Oil prices retreating for more than $1 at Asian trading – could signify that the previous rise was too steep and pullback may happen at US trading as well. I’m waiting for retracement and entering on move up…. keep watching this space!
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Summer may yet be months away (here in Oz) but I’m getting oiled up.