This is the first morning with any notable weakness in eight days. So far, the initial bounce attempt was weak, and now we have a second leg down kicking in. With all the news scheduled to come out of Europe, there's anticipation for positive headlines. But the other side of the trade is that we've had such a big move recently that we are setup for a "sell the news" reaction, even if there are positive developments.
Not only do we have to wonder whether good news is already fully discounted, we also have to remember that the last couple of European summits were disappointing. The folks in Europe are great at announcing that they will make some important announcement, but actual results are almost nonexistent.
I would definitely keep short-side trades very fast, as the potential for a quick spike on news in the next couple of days is high. On the other hand, I have to admit it is a relief to see a little more intense selling for a change, as it may help charts to develop better. There is a lot of interesting stuff that just needs a few days of rest.
I don't believe that this market is topping out yet. In fact, the weak action this morning is probably healthy as patient holders take gains and underinvested bulls finally have a chance to buy a dip.
I started nibbling at a couple of favorite longs that l like longer term. C&J Energy Services (CJES) is one of my favorites in the oil services sector and put an initial position in the Sharkfolio today.