Stocks Lose Gains on AP’s Release of Obama Winning the Nomination

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Stocks failed to hold onto early gains when just after 1:30pmEST the Associated Press released a breaking news statement that Obama had sealed the Democratic Nomination. It was clear as day that traders were given a clear signal that Obama is not their guy. The move was solely on the news that Obama had the Democratic Nomination all wrapped up. Traders are not likely to be keen on his idea about raising the capital gains tax and raising taxes. What could have been a decent day turned into a very ugly distribution day. Get ready for your taxes to be hiked and the economy to be over burdened with taxes and regulation.

This market remains in a correction, it doesn’t appear from the prior two days we’ll gain further traction. However, we did see the Put/Call jump over 1.14 and jump over 20 a sign of fear. We may see a bounce heading into Wednesday trading day but the NASDAQ is showing signs of rolling over. What we’ll need to see for upside is exactly that, upside with more volume. We are on the verge of rolling over to March lows on the indexes and that would be devastating as oil is actually pulling back.

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I think its time to pull back on any new longs unless they are in the Natural Gas/Oil industry. Chinese stocks do have the potential here but the real big winners will be Natural Gas and Oil as the Atlantic Hurricane Season swings into full gear. I am not predicting an overwhelming Hurricane Season, but I am seeing the sensitivity to “potential bad” situation being over played in the market. New longs should be taken with caution and losses must be cut and cut fast!

Enjoy

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