There was twisted logic going on again on Friday. The end result is that Oil jumped ten dollars and here's just how the traders figured it...With the jump in the unemployment rate, well, of course, this is news, anyway, with the jump in the rate to 5.5%, the immediate thought the traders had was that the Fed could be back in the game of decreasing rates again. This thinking led to the dollar going down some more and with the dollar dropping oil will be going up. This happened, oil popping ten bucks, right along side of Treasury bonds going up, this is an odd result. Twisted, indeed.
The prognosis for the stock market over the next couple of weeks is for more of the same, downside. The market has spoken, that it reversed on Friday morning, pretty much on cue as the unemployment number came out. With the turn in prices on Friday, there could be a strong selloff going into the next Fed meeting/end of the month.
We are now going to start following the VIX to see how deep this decline can go. The VIX seems to be poised to jump to much higher levels which is consistent with our short positions. The VIX will be an important indicator for us to follow to find an exit point. The VIX is a volatility index that indicates fear when it goes up. The higher the fear, the higher the VIX.
We see that there seems to be no fear this evening as the futures have found some footing and are rallying modestly as we write this post.
FSI: 93.68 (a similar drop here as in the major indexes)
We've added a few more Jackson pics this evening.
Here's one with uncle Jason:
Forget the Belmont, let's see the Doggies:
Smiling for the camera:
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