A light volume affair today as traders position themselves ahead of the first presidential debate. We find this quite silly, but given the action since the Federal Reserve on Wednesday you should already be positioned accordingly. Crude oil rose on the session closing just shy of a $46 handle. Rumors are the Saudis may agree to a cut in oil production. Where have we heard this story before? Financials took the brunt of the selling as fears over the viability of DB continue to swirl. Merkel has already come out publicly and declare there will not be any bailouts for banks. It will be a watch area for the next few weeks. While we had nice gains after the release of the policy statement by the Fed we have not seen this market hold up well. Best to adjust your exits accordingly and see what this market has in store for us.
It certainly is a convenient to blame today’s pullback on the debate happening tonight. It certainly appears there will be no winners and only Lester Holt and the American people will lose. We really do not wish to turn this into a political debate nor suggest somehow our process will change if one other the other gets in. Trends will always exist across all time frames and we intend to take advantage of our opportunities. When November comes around and a new president is elected we will only care about how we manage our risk and trade signals.
There is a tale of two markets at the moment. On the positive side the NASDAQ and Russell 2000 continue to trade above their 50 day moving averages. However, the Dow Jones Industrial Average, NYSE Composite, and S&P 500 are all trading below their respective 50 day moving average. We would like to see all major market indexes hold their post Fed gains. If we continue to weaken odds will increase a test of Brexit lows would be in the cards. Stick with your exits and keep your position sizes in check.
Just the first of many debates and while most think it matters we do not. Our process works regardless of the environment we may be in. Go out and have a great week!
