By: John Darsie of T3Live
The market looks to finally be finding some footing Wednesday after more early weakness. Another gap down was followed by aggressive morning selling, but the market has reversed course and has since traded in a tight range. Traders are starting to test some longs cautiously at these oversold levels, but will have tight stops if the market rolls over again.
Oil has gotten a big boost today ahead of the big OPEC meeting. Big news on the oil front also came this morning when Exxon Mobil Corporation (XOM) announced the largest oil site finding in the last decade in the Gulf of Mexico. The sites are expected to yield upwards of 700 million barrels. Exxon went from being negative overnight to positive on the open, and continued higher early on big volume before pulling back in. If XOM cant’ hold the $80 dollar level after an announcement like that, it will provide some conviction to shorts.
Overall, though, this is a difficult market for traders to be aggressive in, which is not unusual for the summer months. However, patience could be rewarded waiting for this oversold bounce and many will be watching big tech to lead the charge. Amazon.com, Inc. (AMZN) has shown great strength when the market firms up recently, so it could get going if the market catches a bid. Apple Inc. (AAPL) looks to have halted its 2-day slide following the event featuring Steve Jobs. Netflix, Inc. (NFLX) has also held in well and could squeeze some shorts if the market gets going.
One sector that has had a controlled pull-in during extreme market weakness over the past week is the agricultural stocks. CF Industries Holdings, Inc. (CF) is the best in breed, and traders will be watching it for a break of the descending channel.
Be sure to tune into CNBC at 4:30 PM today to see T3Live contributor Scott Redler’s latest appearance.
