<I do not know what will trigger it, but China will play a key role.>
I agree with your entire post.
IMO, the trigger will be oil and yes, I think China will play a key role in that as well.
Best case for the broad markets, IMO, is 2 years of sideways to lower chop... but the way the S&P has been habitually closing above its 50dma, but on declining volume and while some days see more new lows than highs even as the index closes up? Irrational and we all know the market loves to be irrational longer than would seem possible.
However, some of the whacking gold has been getting while OI in gold futures has declined significantly seems to signal that money is leaving safe haven and returning to risk... but where's the volume?
Are people sitting in cash? And by people, I include the institutional money, too.
We are overdue.
On a related head scratcher, we read about the major E&Ps with record capex budgeted for this year and have seen key OSX players with strong upside moves, but have they all gotten ahead of themselves and the economy?
I don't trust any of it.
Patience may be the best tool an investor/trader can have right now. I've run out of it and while I am not willing to make big bets long or short here, I'm much more active with paired options positions to mitigate risk in both directions. Not saying that's the right move, but it's the best I can think of for the time being.
Oh, and while those capex budgets should be translating into increased sales for all OSX, I'm not seeing actual contracts/orders much in the OSX companies I follow or know well... in fact, most OSX companies (with a few exceptions) I know of are not seeing any uptick in orders/contracts at all yet... partly because there's still nothing really happening in the GoM and despite all of the news out of Brazil (PBR), not seeing actual contract awards beyond the drillers and NOV... my fear is that the sector returns to weakness before it really got back to normal...
Jim |
