I do think that we are probably closer to a bit of a bounce, but that bounce might not necessarily have any follow-through since the trend is decidedly negative and it’s very likely that we will continue to see a lot of this similar behavior.
The $80 level underneath should be supported, and therefore I think we will pay close attention the level if we do break down. If we do break down below the $80 level, then it’s likely that we go looking toward the low again. On the other hand, if we turn around a break above the $85 level, then it’s possible that the market could go looking to the $87.50 level, and then eventually the 50-Day EMA. We recently had the “death cross” when the 50-Day EMA crossed below the 200-Day EMA. This is a longer-term sell signal, but quite frankly I don’t necessarily think that you can take that trade right away, but ultimately, this is a market that continues to see a lot of negativities in general. I like the idea of fading rallies, unless of course we see some type of major shift in attitude.
I do think that we are probably closer to a bit of a bounce, but that bounce might not necessarily have any follow-through since the trend is decidedly negative and it’s very likely that we will continue to see a lot of this similar behavior. However, I also think that it’s possible that we will get the occasional shot, and that can cause a lot of issues as well. Keep your position size reasonable, because headlines will cross the wire from time to time that cause this very volatile market to take off in one direction or the other. In general, I think you must look at this more or less as a range bound type of situation and therefore a short-term trading environment regardless of which direction, we break next. Ultimately, confusion range.