Bottom LineThis mkt is getting dangerous. My short term charts are suggesting that the mkt might still bounce back from today, but upside looks minimal compared to substantial downside and, you know, I am becoming increasingly cautious. The mkt is just taking on a more sinister feel by the day, and I just don't trust it anymore. The bulls are frenzied and the bull train is loaded to the max.
We've already seen unusual moves in silver and oil last week, and today is volatile again. The largest commodity hedge fund fell 8.9% last week, and their official comment was that management was at a loss to explain why oil was falling so fast. The news out of the Middle East was bullish for oil last week and yet it fell anyways.
The concern is that some of the players are getting squeezed in their commodity positions and that contagion could spill over.
For me the short term gyrations are becoming less important, and the bigger play is much more important.
SC