Ironically, probably my best call of the entire year was the one I kept being so embarrassed about: declaring that the crude oil gap at $73.25 would be the peak of a staggering, multi-hundred percent increase in energy over a period greater than two years. Yet that is almost precisely where it flipped around, getting as high as 72.83. Since then, KABOOM, oil has been vomiting all over itself. As it melts past that magenta area I’ve tinted, we have a failed bullish breakout, plain as day.
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Sheesh, what is with this market? Tuesday was awesome for me. Wednesday was absolutely horrible. And now today, Thursday, is going great. Could the market make up its mind? No, I’ll go one better. Have the market go down 2% daily, every day, until it is 0. That’ll suit me nicely. This up/down/up/down stuff is driving both the good guys (the bears) and the wicked evildoers (the bulls) out of their respective minds. It’s sick.
Anyway. I wanted to share a couple of unrelated short ideas (tied together by my clever post title). The first is the financial sector, XLF, which gapped down nicely where that circle is shown. This sector peaked back on January 29th, and its gap is at 27.72. I have so many bank stocks in my portfolio already, it would be redundant for me to short this one too, but it’s a cool chart.
I’ve been kind of hung up on the price gap in oil at 73.25. Yesterday, as we had pushed close enough to that number for me to be satisfied, I did a post called “Close Enough“, where I specifically pointed to XOP and wrote “I suspect this one is going to suffer the quickest.” Here is XOP now, with an arrow marking the timestamp of yesterday’s post.
I’ve been watching the gap in the long-term crude oil contract for a long time. The value is at $73.25. We got up to about $73, which is close enough for me.
Brent crude pushing past $80 per barrel is doing wonders for the energy sector:
Well, everything’s green again this morning (except, mercifully, for bonds). Crude oil has been particularly strong for many months now, and I wanted to point out an interesting little tidbit.
If you glance at the ETF symbol USO, which is a very popular instrument for trading crude oil, you will see its price gap is miles and miles away:
Yesterday when I was doing my live Tastytrade show, I pulled up the XOP and noticed that it was in a shooting star formation. I mentioned off-handedly that “one day does not a trend make”, but I felt it was worth noting (and I mentioned this with similar words in my post last night here). You can see yesterday’s formation quite plainly, as well as what’s going on today………..
The price of WTIC Crude Oil (CL) continues to churn in a tight sideways consolidation range as markets and world leaders digest Israel’s latest release of information regarding Iran’s nuclear program.
As shown on the following daily chart of CL, it’s still in uptrend on this timeframe, and this latest consolidation zone (green zone) may be a “bull flag” formation…suggesting higher prices ahead. (more…)
A well respected Slope trader posted more than once that he never/rarely sells oil futures (/cl) on a Friday.
So with plenty of backtesting to do on this Good Friday, I put that theory to the test, and found there’s a slight edge to that mindset.
The lookback: 5 calendar year 2012-2017.
314 end of week days (sometimes that was a Thursday)
9:00 a.m. EST until 2:30 p.m. EST (old pit hours still the highest liquidity, with 2:30 p.m. still used for settlement) (more…)