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Seasonality part two appears ready to ignite oil bulls as the March contract futures options come to an end, and two key drivers are leading the charge.
Thursday at settlement (2:30 p.m. EST) will see oil’s March contract options vanish to expiration heaven … or hell if you’ve been trying to trend trade /cl with the bullish seasonality that oil has historically seen when the roll to the February contract options starts.
Commodities, led by oil, have been very strong since December 26th (just like equities). We are approaching the 50-day EMA, however, which could be an exhaustion point for this sector.
I rarely use Fibonacci Arcs, but on occasion they do some cool things; earlier this quarter, I pointed out the failure on the arc pattern (green tint); pretty interesting to see what took place since then!
Something occurred to me a day or two ago – – crude oil, Saudi Arabia’s lifeblood, has been absolutely falling to pieces. I was wondering to myself, when did oil prices peak, and also when was the journalist Jamal Khashoggi brutally murdered and literally chopped into pieces?
I’ll save you the trouble of having to keep two separate dates in mind: the killing and the commencement of collapsing prices happened at pretty much the exact same millisecond. Startling karmic, don’t you think?
What a difference a single month can make. Observe the chart of the natural gas market below. Once it pushed past resistance (pink horizontal line) it went roaring higher, devastating – – notably – – James Cordier and his OptionSellers.com fund, purportedly to the tune of $200 million. And then, equally as fast, all the gains disappeared. It’s as if nothing happened.
If you watch my tastytrade show, you’ll recall I had pointed out some powerful formations in the energy bearish funds. DRIP has been absolutely on fire lately:
I did a “crude oil is gonna go up” post recently, but I wanted to pile on with this Fibonacci arc graph of the continuous contract:
