The S&P is bound to test a significant resistance somewhere between 2400-2450. As timing is impossible to know, based on current trends, I would suspect the general market prefers not to take any risk heading into the post-market weekend given the fluidity of COVID19.
Point I:
Crude Oil had its best gain ever today thanks to riding on the back of one POTUS tweet. Dissecting the actual OPEC+ situation, and the possibility for a collaborative global meeting shows the bulls / algos will buy on any glimpse of hopeful news, while ignoring facts and trying to fill in many unknowns with overly optimistic assumptions.
Global crude oil production will inevitably be cut due to the lack of demand for days, weeks, months... (not worth anyone trying to actually fill in that blank), which means prices are artificially inflated in this interim period to help mitigate some of the previous losses from the supply / demand cluster that these producers have never encountered. This creates a melting ice cube for the global oil producers as reaching another bottom for oil prices seems inevitable given there is no clear timeline for a pickup in demand, with shrinking storage space for current supply.
Point II:
Another key factor is the current complications and lack of clarity lenders are facing for the SBA loans. As many assumed, the relief package lacked finer details necessary to allow potential lenders to even make loans to these hard hit small businesses in an efficient and cost effective manner. Based on current reports, many potential lenders are saying that they will not even be able to breakeven by making these loans and holding. And many are unsure there is even a market to sell these loans for liquidity. The government better think again if they think financial institutions are going to hand out money that earns them a net loss after paying their depositors.
This is not trading advice. Purely my thoughts based on the information I gather and analyze on a daily basis. Enjoy and happy hunting!
Point I:
Crude Oil had its best gain ever today thanks to riding on the back of one POTUS tweet. Dissecting the actual OPEC+ situation, and the possibility for a collaborative global meeting shows the bulls / algos will buy on any glimpse of hopeful news, while ignoring facts and trying to fill in many unknowns with overly optimistic assumptions.
Global crude oil production will inevitably be cut due to the lack of demand for days, weeks, months... (not worth anyone trying to actually fill in that blank), which means prices are artificially inflated in this interim period to help mitigate some of the previous losses from the supply / demand cluster that these producers have never encountered. This creates a melting ice cube for the global oil producers as reaching another bottom for oil prices seems inevitable given there is no clear timeline for a pickup in demand, with shrinking storage space for current supply.
Point II:
Another key factor is the current complications and lack of clarity lenders are facing for the SBA loans. As many assumed, the relief package lacked finer details necessary to allow potential lenders to even make loans to these hard hit small businesses in an efficient and cost effective manner. Based on current reports, many potential lenders are saying that they will not even be able to breakeven by making these loans and holding. And many are unsure there is even a market to sell these loans for liquidity. The government better think again if they think financial institutions are going to hand out money that earns them a net loss after paying their depositors.
This is not trading advice. Purely my thoughts based on the information I gather and analyze on a daily basis. Enjoy and happy hunting!