Category Archives: Energy

Duck, Duck, Goose

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Wednesdays before expiration (especially on FOMC days) are special days.

Volume is split between 2 contracts.  We have stops getting killed on both sides of indecision, and then a lot of chop, chop, slam….  chop, chop, slam….  It reminds me of the old Duck, Duck, Goose game.  Only this time, retail stops are left holding the bag and can’t find a chair or get a break.

The witching hour appears to be the hour going into oil pit close.

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Crude Market Forecasts

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The news scams and crude market forecasts are becoming even more crude.
You can read last week’s Bloomberg article quoting the helpful folks at GS here:
Bloomberg: Goldman Says $40 Oil Call May Be Too Low as Demand Surprises

Then, you can enjoy this chart showing what appears to be a nice Distribution Zone, followed by a 10+ sigma, 7-handle move to down.  Please enjoy the custom selected colors:

Crude Reality

Long live 50s!   Errrr…. 40s!

If you really wanna have a blast, join the fun at #RigCountGuesses.

Continued Crude Carnage

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Watching markets collapse is the most fun you can have with your clothes on……….and there’s no blogger out there who’s been more consistently bearish on energy than little old me. Here’s what the front month of crude oil looks like shortly into Sunday’s trading (who knows where it will be by the opening bell, of course……..)

0314-cl

Cramer’s Sense of Smell

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I don’t think there’s been a blogger roaming the streets of Palo Alto more bearish on crude oil than me, and to date, that has worked well. Cramer famously announced a few weeks back that oil’s price “smells like a bottom” (which, again, is the kind of olfactory proclamation that passes for analysis, versus my carefully-crafted charts). I personally think the prospects for energy smell more like Cramer’s own bottom, but we shan’t explore the topic further.

0313-crude

Oil Breaks Triangle Base

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Oil broke below support today but managed to close back above it. Key support for oil is at 48.46. What makes this level important is that it is the base of the descending triangle that has formed. It is make or break time for this pattern, as oil nears the sweet spot of this pattern. The key levels to watch now are the 50.15 level and the 48.46 level. A break above 50.15 voids this pattern. While a break below 48.46 and more importantly a close below it, confirms that pattern. The descending triangle provides a potential move of about -10% if it was to break. This would send oil down $44. Keep an eye out because if Oil sells off it just might be that catalyst that gets this market to sell off further. This pattern is also seen in USO. (Click on either chart for larger version): (more…)