No positions were opened today as a consequence of the new low in US oil within the first 30 minutes of the trading session. DUGs rising wedge did play out and its currently retesting resistance. Most energy stocks gained slightly. Lets see what Monday brings. CHK report earnings on the last day of the month.
This has been a very generous forum thread over at FTV and is well worth a look.
Is oil getting ready for a reversal and what of energy stocks in general?
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Before the fall in oil we saw a lot of money coming out of energy heavyweights. Todays price action in USO combined with the falling wedge on the futures contract ( its not clear on USO ) to me is a signal to be on alert for a buy signal . We have hit our first fib level on USO at 99.81 and are left with a dragonfly. The volume isnt fantastic but when you look at some of the energy stocks there are some showing signs of recovery. CHK and GMXR are such examples. GMXR is covered in break out traders latest video at free trading videos and here is a chart of my own. CHK . Its made huge moves to the downside but seems to have bounced hard.
This is one to keep an eye on but not for too long I feel. Airlines are showing weakness again so have we just seen the previous game of opposite moves between oil and airlines on a bigger scale ? I will assess tommorrows action but would feel safe to open a small position with a stop at 47 with a target of 59 bucks ( based on closing price of 49.06) . I will watch its first 30 minutes of trading and be ready for a quick entry especially if no selling arrives. If Oil looks like its plowing out new lows though I will give the position extra management time and perhaps scale out early. This stock is heavily owned by institutions and insiders.
In other energy stocks keep an eye on DUG , its looking a little wedge like on the daily / 60 minute and on the 60 minute there is a bearish momentum divergance on the macd. This inverse ETF loses value as energy related stocks go up. So there is some confirmation available and the whole clock work mechanism starting to wind might be getting ready to ” gong” in a new direction.
So, it hasnt played out like I expected , will it ever ? Today I entered gold short with a smaller than planned position size , given I was readjusting quickly. Things dont add up entirely , dollar down and Gold down but at the same time selling pressure arrived today when Bernanke started to mention in Fed speak that he may have to raise rates.
I think Gold has a little way to go before being ready to short. In fact if the gap up on Monday is not
too big I may take a long for a few days . Corey has a great short term analysis on his blog at Afraid to Trade :: Short Term Gold analysis
