The trade to nowhere.
As of the close today, I’m up approximately 1.14%, less commissions. Considering that the stock market average yearly gain is just north of 6%, then a 1.14% gain in just three days doesn’t sound so bad. But there is absolutely no margin for error in this trade.
Because SSO was able to close above the 13EMA, I am still holding my position, but unless or until SSO can get all the way up to the 49.50 area then this remains an extremely risky trade. What would happen in the 49.50 area is that the 13EMA would be in a position to cross up through the 34EMA and that would then give a legitimate buy signal in the 60min time frame. Forget the daily chart. It isn’t anywhere near giving a buy signal and won’t be unless SSO can somehow manage to get up to $50. With the way this market is struggling to stay afloat, that isn’t likely to happen anytime soon.
While I will try to hold for as long as possible, should SSO break this new and very steep rising trend line in the 60min time frame, I’m likely to sell out and ask questions later, if you catch my drift.
This daily chart shows the real problem. $SPX/SSO, etc is so beaten down that it will probably take another week to 10 days before the daily chart firms up enough to give a ‘buy’ signal. That isn’t likely to happen before the dominant down trend gets back in the driver’s seat.
Ceridian just came out with their report for May showing an increase in fuel consumption for over-the-road truckers. This is a positive sign and shows that while the recovery is weak it is at least not getting weaker at the moment. Unfortunately, this will be Ceridian’s last monthly report.
I’d rather be watching from the cheap seats.