Category Archives: Energy

Orange is the new Black

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It looks like another day of record highs across the board for equities. I’ve become inured to it by now. I’m particularly focused on what oil is doing, since apparently the OPEC production cuts are enjoying nearly full compliance, which is compelling oil to make yet another trust at the top of its range. It simply cannot seem to escape this very tight range, and OPEC has at a minimum done a great job creating a rock-solid floor for oil.



Oil Chart Withstands Huge Inventory Builds

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It is remarkable that crude oil has managed to hold its Jan-Feb coil support line in the aftermath of two huge builds in the inventory data. That said, however, I keep thinking that Saudi Arabia (and OPEC) are under the market on every $2-$3 decline to preserve the integrity of “The Agreement” and also to support prices into the Saudi-Aramco public offering later this year.

Whether or not there is any truth to my suspicions, the fact remains that for the time being, the high-level coil-digestion formation remains intact and viable, and as long as that is the case, the overall set-up in oil is bullish and in a holding pattern awaiting upside continuation to $56.00 and then to $61.00. Only a reversal and break below $51.22-$50.71 support will wreck the set-up.

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A Clean Getaway

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I don’t normally monkey around with leveraged ETFs, but I was so enthralled by energy’s weakness, I had built up a big long position in ERY (as mentioned in my Lake Erie post on Tuesday). Last night, I calculated the measured move on it, drew a horizontal line, and watched it closely. Wednesday morning, before the inventory report, ERY nailed its target, so I GTFO in a big hurry. Thank goodness, eh?


Oh, and, umm, this tweet from this morning kind of sealed the decision for me:


T/A and Sentiment in Crude Oil

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It seems that I don’t post very much on oil (or Natural Gas, for that matter).  These are covered each weekend in NFTRH; but yes it’s true, I give oil and energy short shrift in public posting.  Probably because I have other higher priority interests right now.

But a subscriber asked about shorting oil in light of the fading efficacy of the OPEC deal, Elliott Wave’s (I assume he means EWI) apparent target of $56 with a crash due thereafter, and Sentimentrader’s high risk sentiment reading.  So let’s look into it.

WTI Crude Oil is bullish above key support by daily chart.

wtic daily


Crude-cial Support

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It seems the world is maybe starting to get a little worried about the new direction of our once-great republic, as quotes have been red pretty much since trading opened on Sunday. Nothing dramatic, of course……..that type of thing isn’t allowed anymore. But at least the right color.

What I’m watching most closely is crude oil, which has been stuck in an ungodly boring range since December freakin’ First. Support is at 51.59 on the front month; if we can break that (miracle of miracles), we can really start to see some downside action on all these energy shorts.