We finally had some economic data in the jobless claims and productivity numbers to consume this morning. However, the big event for the morning turned out to be the ECB’s Draghi’s press conference. The ECB had announced earlier that they were leaving interest rates unchanged and there was speculation that the ECB might be considering raising rates. Draghi made a comment about the European economic recovery was going to take some more time and that’s all it took to start the stock markets tumbling.
The bulls were trying to push stocks through their multi-year highs into the 8:30am EST reports which for the most part were bearish, yet price was resilient. We’ve seen this pattern before over the last few days were all news seems to be good news and price keeps grinding higher. Once the cash market opened, the buyers made a weak attempt to get back to the overnight high, but the institutional sellers came in strong setting up today’s example short trade opportunity. I’ll have to admit, given the resiliency of the buyers recently, I had in my head that the overnight high would get retested. I debated with myself whether or not to take the short opportunity and decided to pass. I could not have been more wrong; the opportunity turned into a trade from the high of the day.
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