Today's action looks and feels like one of those days designed by the market gods to throw a trader's mind into turmoil. So what's one to do? No, not pray. The market gods aren't so keen on such behavior! The best one can do is step back and determine if anything has really changed. Let's start with the S&P 500. Yesterday, I was calling for higher prices as the index came out of a consolidation. The day stared out just fine but then got messy:
I'm keeping a close eye on this triangle because I believe the next big move will be in the direction of its break. I'm still biased to the upside, but after the upper trendline held in the morning, I went flat for safety.
As for commodities, obviously a lot of them are getting hit in reaction to the dollar's strength. I believe the selling was overdone. Nothing has changed with regard to the big picture, and even with the dollar hanging around its high of the day, commodity prices are clawing their way back. Sugar and copper have cut their early losses in half. Silver bounced from down 70c to down 40c (I added to my position when it was down 60c). Oil erased a buck forty loss, and natural gas is up 14c after sporting a 10c loss.
I don't have anything new to add chart-wise for these. You can look at yesterday's post and get an idea of my thinking. The only one that worries me a bit is sugar. It gapped below the 13.50 support (October contract) and has been unable to regain that level. I also think the selling in silver is about done. Tomorrow's action will be very important.