Is this the opportunity to go short?

[dash1]

Hi guys.

So many of us have called this rally last week. As we can see due to the deal that the oil producing countries have made, everything around the world is in the green.

 

Now, from my understanding, this deal if it goes through, affix Saudi Arabia the most. My understanding is that an Offishall meeting with these oil producing countries only takes place in November. Bearing that in mind, what stops Iran changing its mind before this?

 

Either way I think the market has rallied on this speculation regarding oil and that is all it is.

 

My initial thinking is that we could see some profit taking tomorrow which may present us with an opportunity to go short on the indexes..

 

However, we need to see the housing numbers out of the US and new jobless claims before making such a call.

 

I am very interested to hear your comments on this.

[Mercury]

Are you talking Short day trade or longer term?

 

The idea that the rally connection to Oil deal may or may not be true, although I don't really see the connection other than a rally driven by Oil stocks perhaps, which is what seems to be the main driver (at least on the FTSE100).  However industrials are also up (and why would high priced oil deliver that?) and we are also seeing a reaction rally in Financials.  For the rally to not only stop but reverse we would also need to see Oil reverse, is this what you are expecting?  If so why?

[dash1]

I was reading a report out of Goldman Sachs. They maintain that this new oil deal May not be successful as it is made out to be.

 

All this will do is encourage other non-oil producing countries to conduct more drilling exercises.

 

Countries like Nigeria and Libya who's economies are so fragile and are so dependent on oil may not agree and stick to the deal.. Why financials and industrials have taken off the way they have, I cannot answer.

 

I was talking about A day trade

[Mercury]

OK I get you.  And I agree with GS but don't think that is material to stock indices, much bigger impacting factors about.

 

Can't help you on a day trade but for what it is worth I think the next few weeks will be very choppy but tending up UNLESS there is a rejection from the head & shoulders neckline on US large Caps, in which case a rapid drop would happen.

[dash1]

It's a little early to tell however, it looks like my initial thoughts seem to be playing out it looks like the US has opened lower and the euphoria of the Oil deal is slowly diminishing.

 

I am expecting a pullback tomorrow due to profit-taking as well. As a new trader so to speak, I consider myself a day trader as I have been trading the indexes to a certain degree of success.

 

I hope one day to be as experienced as you are when it comes to your technical analysis and insights.

[Mercury]

If you are getting success then stick with it.  I couldn't make the day trading thing work, horses for courses I guess...

[dash1]

I never expected such a pullback? Looks like the market is really getting jitters around the banking sector