All the News That's Fit to Fade

We finally saw markets react this week to the heavy and steady news flow, as political allegations both here in the U.S. and Brazil rocked equities on Wednesday. There is a colorable argument to be made that markets were simply looking for any old excuse at this point for a shakeout, given the low volatility drift higher we have been seeing for quite some time.

Regardless of whether the news served as a catalyst or excuse, though, we saw a nice pop in volatility to accompany the drop in stocks. However, markets bounced back to recover a decent amount of Wednesday's losses to close the week out, with the S&P 500 closing back over its 50-day moving average.

Even though a bit of a fade set in this afternoon off session highs, I doubt bears can be very comfortable here given this market's history of shocking "V-shaped" recoveries to new highs into each and every dip. I am most curious to see whether the rally in oil and energy stocks has staying power this time around. The sector has been acting so poorly for so long that it may finally have its day in the sun, if only for a few weeks. Even then, as traders we want to be aware of such opportunities. 

Over the weekend, I will highlight some subtle plays related to the energy sector for Members, as well as plenty of other fresh ideas across all markets. Be sure to check it out. 

Have a great weekend, and I will see you there!