Monday, October 10, 2011
Adam Hewison: If Slovakia Votes No, Crude Oil Tanks on Tuesday
These are job openings that the private sector needs to fill. I know from our own experience here at our company, finding competent people it extremely difficult. Part of the problem, in my opinion, is that many job applicants have no skills.
The CEO of Cummings, Tim Selso said he can’t find skilled workers for his manufacturing plants. This is a common complaint that many CEOs share.
According to economists, the average worker contributes about $45,000 a year to GDP. If we could just fill 1/3 of those jobs, it would have a huge impact on the economy.
Like many traders today, we were surprised at the velocity of the rally which is based on a potential agreement coming into place in Europe. At the moment no one knows what the deal is, and nobody in a position of authority is indicating what the deal is. The vote from Slovakia has the potential to torpedo any recovery and is a big hurdle approaching tomorrow. If that tiny country votes “no” to this proposed agreement, it could send stocks, and in particular bank stocks, to the cellar!
That leaves us with just one option.....What are the Trade Triangles saying?
Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = - 55
The November crude oil market has rallied back to an area that was previous support and should present some fairly serious resistance. We were somewhat surprised at today’s action however, our Trade Triangles remain in a sideways mode indicating a trading range.
We are not totally convinced that this market has turned around and we expected to once again reverse and test the $80 level. As you know, this market has been closely tied in to the movements of the S&P 500. Overall we still view the trend in this market as negative. Intermediate and Long term traders should continue to be short the crude oil market.
November crude oil closed up $2.40 a barrel at $85.38 today. Prices closed nearer the session high again today and hit a fresh three week high. Bulls have gained solid upside technical momentum just recently. Prices have rallied around $10.00 a barrel from last week's low. Higher U.S. stock indexes and a sharply lower U.S. dollar index helped to boost the crude oil market again today. The bulls have the near term technical advantage.
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