Friday’s tight opening range didn’t last too long, and the lackluster (but not risk-off) credit market posture gave way to panicky selling on incoming Eastern European news. Suddenly only safe haven plays such as Treasuries, gold and then oil, strengthened while stocks sold pretty much across the board.
As for Monday‘s session in stocks, the odds of a countertrend move to the upside, at least intraday, are good. Just a quick glance at the dollar, gold, oil and Bitcoin would reveal the extent of possible stabilization. Stabilization, not a reversal, because HYG is unlikely to turn up, and I‘m not looking for stocks to start moving up again. Thursday marked a high point in the countertrend rally, which was cut short after some 5 days only. Sideways to a little up is the best the bulls can hope for on Monday.
In such times smacking of renewed volatility (Thursday’s CPI was a great example), proactively taking portfolio exposure down a notch, is a wise move. Coupled with Friday’s bet on return of strength into more commodities (rebalancing the rise in crude oil with the decline in base metals), this is the time to open fresh positions cautiously, and in the direction of the medium-term trend, which in case of precious metals means anticipating eventual breakout higher.
Stay tuned for Monday’s extensive analysis, and have a nice rest of the weekend.
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.
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