Crude Oil mean reversionAs expected previously, Crude Oil prices did a spike higher (blow off top) and in the past week started a mean reversion, a really mean mean reversion.
Expecting support to be about 93 where the daily 55EMA is met, and also possible to spike down below 90 this week, or early next week.
Support ranges are marked out in yellow boxes.
While this is some relief, at least to stoking long term inflation, it also appears that the ripple effects would be widespread and more lasting. In any case, Crude Oil, Energy sector will be experiencing a lot of volatility over the next months...
NOTE: it is a rather interesting time where all asset classes appear to be cpitulating with Gold and Oil going down fast and the Index futures still pushing down with momentum.
XLE
cDon't listen to all the pundits when they tell you the market is strong. If you had to borrow money every year to keep up your lifestyle and pay off those debts with larger debts, would you say your personal economy is strong? No. That's exactly what the government has done for decades and the chickens are coming home to roost. The SPX (S&P 500) has been phantom collapsing since August 2021 but it's hidden by the larger weighted stocks. It's possible we see a quick rally before a huge sell-off, but I wouldn't place that bet. There are good companies that are down dramatically. Even Chipotle (CMG) is down 31% in the last 6 months which is a crash! Here are some more: Clorox (CLX) down 28%, BlackRock (BLK) down 28%, Paypal (PYPL) down 69%, Penn National Gaming (PENN) down 50%, Paycom (PAYC) down 39% and so many more.
The first area to break we need to be watching is the 3,700 level. The next is the 3,500-3,250 then the where there is a possible area of large support off the old pre-pandemic highs. Our average sell-off yellow bar is 3,000 - 2,800 as a very fair level of support. That isn't to say we can't have a 50% collapse or more, but this is a great starting point to average out and see where this may end. If we see banks folding, WW3, or anything along those lines, expect massive moves to the downside and then incredible inflation (FED money supply growth).
Oil up 38% in 7 days! When to sell?Oil exploding higher again making a 7 day run of 38% and XLE running up 14%. Long-term XLE is my play, raking in the dividends but taking profits relatively soon might be wise. We are right at the resistance level for XLE that looks to be pretty heavy but that resistance isn't like the Ukrainian military so I think it's more likely we blow through that level if oil continues. it cannot continue at this pace for long and that's why I want to be taking profits.
If you're trading in the futures market then you have a much better chance of pulling in some high percentage gains in the short run as I believe somewhere above $150/ barrel you will find resistance and it will come crashing down. The question really is, where is the new support? As long as this war continues I think we will stay above $78/ barrel as the new support level. especially with inflation. If WW3 cracks off, all bets are off and I wouldn't see it falling below $100. That being said, XLE won't experience the same type of gains in the short run as a trade. As soon as oil sells off people will sell XLE hard because they are really betting on future gains of the sales of gasoline which won't be there if oil has come back down. The catch is if oil continues to stay elevated and without any subsidies from the government, then there will be less driving which means fewer sales and XLE will be falling.
This is why I think it's wise to take profits on the way up, find a huge sell-off and get back in position on the way down. As we are likely heading into a recession I may roll some of this into TLT for the short run as I exit don't he way up to potentially make some gains in TLT without taking the risk in XLE. As XLE falls when oil pops the lit off, that's when I take my gains in TLT and roll it into XLE again for a longer trade but increasing my position by 20-30%,
$AMZN: Topped long term, short itI'm short $AMZN from here, I had briefly ridden a daily down trend signal before, but now we have a massive monthly topping pattern kicking in. I think it is a good market hedge, and might be a great long term pair trade to short it against energy longs as the ultimate reopening/end of the stay at home bubble trade. Bezos leaving was the kiss of death, antitrust risk is massive for the company, I can see this become a lengthy and very painful decline for shareholders. Better abandon ship ASAP .
This might be the canary in the gold mine for FANG as well, the rally since 2009 lows is likely over and we can expect a 2000-2012 style move again. Lots of pain for hodlers, don't be left holding Bezos' bag here.
Best of luck,
Ivan Labrie.
Oil rising be ready to sellAs war drums are beating and WW3 may be on the verge of becoming a new reality, oil is ripping the faces off of people shorting it. It's also ripping your wallet apart. I expect a sell-off at some point if it continues at this rate but probably not before making new all-time highs above $150/ barrel. I expected XLE to get to $135 over the next 4-5 years but now it climbing very quickly ut I believe that is short-term. I may be taking some profits around the $100 mark as I expect government control to come in. I am not sure what that will look like yet but if it is a subsidized market whether cash in people's pockets or giving money to oil companies to keep the price low, that's inflation so I expect those stock prices to continue to rise. In the short term, you can hear the negative talk that may trash these stock prices which is exactly why I want to be taking profits at technical places and be ready to buy on these bottoms.
XLE oil WTI
Breakout portfolio for a breaking down world.The world order established after WWII is changing before our eyes. Indexes have broken their uptrends. Nasdaq stocks have been crushed. Old commodities are becoming more important to nations than ever before. Security isn't guaranteed.
As investors our goals remain unchanged. Give ourselves and our families the best chance to succeed through financial independence.
Considering the changes in the world, I present to you five ETF's that when equally weighted as a single fund are breaking out to new all time highs.
$BUG - Cyber Security.
$XAR - Aerospace and Defense.
$XOP - Oil and Gas Explorers.
$XME - Metals and Mining.
$COPX - Copper Producers.
There's very little overlap between these funds. I prefer XAR to ITA due to the high Boeing exposure of ITA. The beta is high so expect moves greater then the indexes in either direction. When equally weighted there's a small yield of about 1%.
With ETF's you take the underperformers along with the outperformers. However, you don't have to worry to much about single stock risk. Stock pickers may prefer to dive into these funds and select the strongest stocks from the group.
I'm posting from my phone. Please excuse any errors.
Good luck to all.
Markets at War. Where to go.When war drums are beating, markets take a beating. If WW3 begins, all bets are off in stocks so expect wild swings and crushing sell-offs. People don't want their stocks locked up where they can't sell and I don't blem them. It's effectively a bank telling you that you can't pull your money out. Another reason I use crypto for a large part of my investing. holding in commodities like agriculture, gold, silver, copper, and other areas I think is a great play and part of a long-term portfolio in this environment. Especially oil with everything going on. Interesting times are ahead of us and we cant truly know for sure which way this goes but be positioned the best you can to protect your assets.
SPY ProjectionsAnalysis done on daily candles. Markets are bracing for a Russian invasion into Ukraine in the coming days, which is sending equity markets lower, but also providing opportunity in other sectors. In the last few weeks we've seen the high valuation stocks begin to correct themselves into reasonable prices, but we saw sectors that have been stagnant in the last 24 months finally moving. Energy, consumer defense, and precious metal sectors didn't perform nearly as strong as tech stocks did after the Covid-19 lockdowns, but the rising fears of potential war is bringing buyers into these fields. We'll be focused on those two sectors for bullish trades and also capitalizing on bearish moves by playing option puts. We have a few names in mind to trade in each sector, but we'll wait until the right time to enter. During times of uncertainty as such, markets will largely be controlled by news updates so our plan as always is to come in knowing which sectors react to what and then executing trades on the stocks with most movement in those sectors. Looking at SPY's chart, Friday ended back in vulnerable territory and the news from the weekend may send us to retest the 420.00 level again. If we break below then 400.00 is a potential next level for SPY to move towards; this will provide opportunities to take on short set ups in the overvalued companies on our radar.
XLE to hit $130 by Jan 2025 a 300% gain from 2020 lowsCheck out the two trends prior to this. Clearly, you can see the run of over 300% that was 6 years long and then another 5-year trend at 142% gain. I believe we have entered commodities run and companies that produce oil and sell gasoline or diesel are going to benefit hugely. I am making a call that by January of 2025 we will see XLE at $130. Even if it doesn't, WTI Crude will hit that $130 mark. Two calls right there I think are very realistic repeating that 5-6 year trend which also matches the first 300% gain although the climb may be steeper. I think that climb coincides with how much inflation we have so I believe it's still a fair analysis overall.
If you have not watched my recent video on hyperinflation, I suggest you do. At least go compare a 1month chart of the M2 money supply (M2SL) to the SPX. Hand a hand increases and parabolic running back to 1960. It looks to be sometime around 2025 we hit our first level of lift-off, straight up as the curve stops and begins to head to the moon. This happens to land around my chart here with XLE being at $130 by 2025. After 2025 all bets are off. WE could be heading into a massive inflationary person and it could be a billion per share or something crazy. That number won't matter anymore of course as it's only nominal.
It’s time to fly with BoeingI have waited quite a while for Boeing to look like a buy and i believe it’s time. The falling wedge has showed slowed selling into support and fib’s 382. Monthly and weekly stochastic are also converging to upside. The safe thing to so may be to wait for the wedge to break, but I am of the belief that the time is now. Also, I have considered $XLE breaking out already and see $BA following suit.
Not financial advice. I have linked my past Boeing charts.
Happy Trading.
$XOM bullish break above long 7.5 year trendline on monthly$XOM bullish break above long 7.5 year trendline
And on the weekly looking like a golden cross (w/ my 35 & 180EMA’s which are quite reliable)
No trade plan right now, just an observation… I sold at 70.83 on the last swing but will add this one to my radar of things that could stay bullish. Energy stocks $XLE (SPDR Energy Sector ETF will be on my list as well)
Definitely a bullish move and I’ll be looking on the smaller timeframes for a possible entry…
Though, also noting, that in the last financial crisis XOM did decline as well, so that trendline will be watched carefully…
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I am not your financial advisor, but I will happily answer questions and analyze to the best of my ability but ultimately the risk is on you. Check out my ideas, but also do your own due diligence.
I am not a bull. I am not a bear. I just see what I see in the charts and I don’t pay too much attention to the noise in the news.
If you want me to analyze any stock or ETF just leave me a comment and I’ll do it if I can. (If I have time)
Have fun, y’all!!
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Energy Sector going Down. XLEImmediate targets 60, 58, 57 .
We are not in the business of getting every prediction right, no one ever does and that is not the aim of the game. The Fibonacci targets are highlighted in purple with invalidation in red. Fibonacci goals, it is prudent to suggest, are nothing more than mere fractally evident and therefore statistically likely levels that the market will go to. Having said that, the market will always do what it wants and always has a mind of its own. Therefore, none of this is financial advice, so do your own research and rely only on your own analysis. Trading is a true one man sport. Good luck out there and stay safe
$PXD at PCZ of Bearish Alt-Bat with Bearish DivergenceWe have Multiple Instances of Bearish Divergence on both the MAC and RSI at the PCZ of a Bearish Alternate Bat and at Price Level Resistance I expect to see a significant Bearish pullback from here.
$CTRA: Lower Low Hidden Bearish Divergence Monthly ContinuationWe have Hidden MACD Bearish Divergence on the Monthly and if proceeded by follow-through price action we can be in the midst of breaking through the confirmation line of a 3 Rising Peaks. Upon Breaking through i suspect it will give us an ABCD BAMM movement all the way down to a minimum 88.6% retracement but at a maximum it could go slightly lower than that.
Bearish Divergence on US DollarThis is a long term monthly chart of the US Dollar. There was a bullish divergence back in the 1980's that preceded a long term strengthening dollar throughout the 90's. There's a bearish divergence that started in 2014 and is intact today. I don't like to put to much emphasis on inter-market analysis because it can cause paralysis by analysis. However, wouldn't this question the breakouts we see in banks? Would this confirm the breakout we're seeing in energy continuing from last year? If the dollar does weaken even with higher interest rates does that mean that inflation is here to stay? I have no idea. LOL. I'm no economist but I think this chart is interesting. Thoughts?
Week 4: Sector ETF Expectations I use sector ETFs in my IRA account. Currently, I hold XOP and XLF, and I wish I held XLE. I will try to buy XLP (Which shouldn't be a problem) next week.
For Week 4, I'm expecting XLF to firm up and XOP to come in a bit. XLE would be kind to give me an entry point at prior resistance/ support, but we'll see. Oil looks darn strong at the moment.
XLF (Held), hurt me Friday, but held support.
XLE on fire
XOP (Held), can it hang on and break through resistance?