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The only sector who has been steadfast in the face of the horrible counter-trend rally (which, God willing, appears to have ended last Friday) has been energy. Here are my energy-oriented shorts, zoomed in to what I think are the most relevant sections.
Greetings, my Slope brethren. I’m not usually a fan of sequels, but sometimes they’re good. Diehard 2 comes to mind. The Empire Strikes Back was pretty good. But, an oil sequel? “Oil? Oil? Who said anything about oil?”. Wasn’t this the one commodity that was going down these days? I didn’t expect to do any market writing at the moment, and then I saw this tweet from the President.
One asset which, unlike equities, has managed to go down persistently for more than twelve minutes, has been crude oil. I’ve been harping on the failed right triangle pattern every day for the past week, and this continues to perform. Crude is down yet again this morning, with futures off over 1% and the USO, shown below on a daily basis, tumbling nicely.
I wanted to talk a bit more about my bearishness on energy.
Below is a chart of USO, the crude oil ETF. The horizontal line at the top and the sloped trendline at the bottom define the right triangle pattern. On January 15th, prices broke out, yet this breakout lasted literally hours. Afterward, it broke back below, yielding a failed bullish breakout, and it skidded for months. Importantly, it completely collapsed below the pattern in early April, and it has been below the trendline ever since.
Just a quick post before the opening bell rings: it’s good to see all the red on the screen this morning, although recent experience (yesterday!) shows that it really doesn’t mean a thing.
The JOLTS report is going to come out half an hour after the open, so we’ll see if that V’s the market like yesterday. (Of course, the V yesterday was based on absolutely nothing, so who knows). Suffice it to say, for all its attempts to do so, the /ES has not found the power to clamor back up to its Fibonacci at 5650.
