BDI has gone straight up since I last mentioned it on 1st Nov.... and the shippers have not moved at all... The rise in BDI is really making the situation very confusing, i.e., the commodities, e.g., iron ore, coal etc. are finding home from other countries to china.. so this definitely is a good sign from recovery point of view... Solar stocks, especially Chinese solar stocks seem to have a good bid today across the board... Refiners, e.g., WNR, TSO, VLO are also worth keeping an eye on... Not sure if they are ready to move up yet but the sentiment in these sectors are at all-time low and so is the short interest and hence they may move way before the fundamentals catch up, if they ever will...I am definitely not in the recovery camp but there is no harm in trading over others' optimism in short term and ride the train until it stops :)...
The $DXY, on the other hand, is getting trashed. Everyone is expecting a bounce and so am I. This makes me worry whether the market will trick all of us, like it always does, and take $DXY to the woodsheds for one last capitualtion move lower. This surely will cause a spike in the equities. This scenario is best and we will wait and see how this unfolds. Meantime, if the $DXY closes above $76.3, hallelujah!
Since the dollar is trashed lately, the commodity equities have already spiked and who knows how much of recovery is already baked into the prices. The market is surely showing signs of distribution but its not as overbought as it once was... so it may just grind higher earlier next week... mind you, it can come crashing down anytime though.. I am going to wait for that one long red candle that will confirm the next big downward move, which will lead us to test 200EMAs on Indexes for once and all.. Note that $RUT is showing weakness, the emerging markets are split as well...China & Brazil are weak and India is rallying with no obvious signs of weakness... Waiting for a confirmation before I am going to go all in... Meantime, I own 50 put contracts of WMT...
Cheers...
