Following a rally that started early last week and culminated with the DJIA ending the week on the high tick, there was a lot of hope that the six week funk might be over.
Rumors had been circulating on Friday that the sovereign debt crisis in Spain might be resolved with an infusion of capital from the European Central Bank. Over the weekend they were confirmed and Euphoria ensued.
Sunday night started out like the markets were breaking out of their six week funk. The DJIA was up over 200 points Oil was up over $2 a barrel and the US bond market was in retreat, everything was going great.
However, afternoon trading in Europe started to sag as some of the early buyers decided that it was time to lock in profits. Shortly after the New York opening the markets started a steady break. Oil gave up the ghost and by mid afternoon was down almost to the low levels that hit last week until it reversed.
Buyers came into the treasury market and the sharp selloff continued until the closing bell. The markets had given back all of Fridays gain and ended up on the low tick from Friday.
Was today the end of the comeback, of the beginning of a bigger selloff?
The market will tell us which way it is going, but it will take discipline to take those clues and turn them into profitable trading opportunities.
I have taught hundreds of students the skill of discipline and turning situations like volatile markets into profitable trades and I can teach you too. To reach me and have me teach you one on one, you can contact one of my financial consultants by clicking here:
Keep those stops tight.
Todd “Bubba” Horwitz
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