Major averages fell yesterday on higher, above average volume, closing near their lows. The odds of the follow-through day of lats Friday, January 26th, working are at 3% given the distribution day on the day right after the follow through. Yesterday's distribution day underscores these low odds.
That said, markets and oil are trading mildly higher today though the downtrend remains intact. Expect elevated levels of volatility to continue. In the face of such volatility, positions taken either long or short can only be viewed as short-term affairs, and when one has a 5-10% profit in any such position it is generally prudent to take those profits. In addition, holding positions overnight carries added risk given the tendency of the indexes to gap up or down from one day to the next. This remains an environment for nimble, short-term traders only.
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