Comments on: A Daily Look at Crude Oil Developing Reversal

By: Video Analysis in Crude Oil - Surviving $80? | Afraid to Trade.com Blog

Video Analysis in Crude Oil - Surviving $80? | Afraid to Trade.com Blog — Wed, 02 Dec 2009 03:40:20 +0000

[...] whether or not he sees a reversal up in Crude Oil (as I mentioned in a prior post entitled “Daily Look at Crude Oil Developing Reversal“. He goes a little further than I did and sets possible targets using Fibonacci Retracements [...]

By: terry

terry — Wed, 11 Mar 2009 02:08:28 +0000

I really like your blog and recommend it on stockhouse boards. Oil ETF’s have issues that not intuative that come from the contract roll over. Losses occur on the ETF’s that do not occur on oil. Besides the rebalancing losses, there is also contango. These two effects have accounted for over half the loss on a fund like HOU. Because of these effects. A trader should chart oil THEN trade the fund. The chart can be misleading otherwise.

As an interesting chart, could you chart the SPY against the dollar index or the CDN dollar? The SPY has not dropped that much in CDN dollar terms.

By: Valentin

Valentin — Tue, 10 Mar 2009 17:43:45 +0000

hi Corey and everyone,

I also think there is a typical supply and demand imbalance. The OPEC has reportet for years that it has the same reserves. How can this be? You don’t have to be a geologist to know that the ressources won’t last forever. Yes there are other reserves (Russia, Afrika, Kanada…), but those countries have not shown that they are capable of supporting the oil industry well. And if they finally do, it’s gonna take years till the oil finally comes to the market…

What do you think ist the best instrument to profit from a long term upward trend in oil? (also considering potential payment risk) I am also thinking of buying Companies like Conoco Philips, BHP ans hold them as an investment. And I am defininately not leveraging on oil, only an investment…

best greetings

(hope my english makes sense, as I am an 21 year old austrian guy!

By: Corey Rosenbloom

Corey Rosenbloom — Tue, 10 Mar 2009 15:54:16 +0000

Neil,

I’m not really seeing the neg. divergence in stochastics, because it doesn’t have much more room to go to the upside. That’s the problem with ‘bound’ oscillators.

I’ll have to look into it more but it just feels like we have more room to run up than down but as a disclaimer, because of the divergence and very cheap prices (having accustomed myself to oil at $150), I am wildly bullish crude oil so I might be slightly biased.

By: Corey Rosenbloom

Corey Rosenbloom — Tue, 10 Mar 2009 15:51:09 +0000

Anon,

I’m finding Oil’s Wave structure difficult. I’m able to count it much easier on the Monthly Chart, and am assuming we’re starting a B Wave up but as for the lower-timeframe fractals, it’s more murky for me.

By: Neil

Neil — Tue, 10 Mar 2009 06:25:50 +0000

Hi corey,
Great post again …I agree with the massive positive divergence in the macd thats been there from sometime, but if we see the daily charts, there’s just a little hitch about going long. Because, if we see the slow stochastics, its forming a negative divergence, though the k line hasn’t yet crossed over d line, so will have to wait for that signal for any confirmation of a correction. Secondly another resistance that I see is the 100 day sma which is at 49.2 as of today. so if the divergence happens in stochsticcs after today’s close, I might want to go short with a stop of above the 100 day sma, and then look for fib levels to cover my shorts. But first of all I would want to wait for the crossover of the stochastics for the confirmation of the divergence

Would love to know of your insight about this analysis.

Thanks in advance.

By: Anonymous

Anonymous — Tue, 10 Mar 2009 05:49:22 +0000

Oil appears to be in the corrective 4 … a lower 5 anticipated…but not promised!

By: Corey Rosenbloom

Corey Rosenbloom — Tue, 10 Mar 2009 01:39:48 +0000

Andrew & Valentin,

Perhaps, but the only problem with DXO is something I think most people just aren’t seeing which reflects the realities of double leveraged funds.

A 20% move in DXO – which would be a 10% move in crude – would result in a $0.40 move in DXO. Not that impressive from a dollar standpoint. You’d have to purchase thousands of shares to make it really worth it.

By: Corey Rosenbloom

Corey Rosenbloom — Tue, 10 Mar 2009 01:34:50 +0000

Valentin,

I don’t know if it’s just because oil used to be so high that we’re just conditioned to believe it can’t be this low but something feels really odd about crude being this low and gasoline prices falling from $4.30 to $1.50 in a few months. Almost like we’re in a parallel world which affects our analysis (as in, crude can’t be this cheap!)

Long term, it does seem like the obvious thing to do here it load up and hold for a few years but given that oil keeps creeping lower, we may need to wait for a buy signal – which could be coming soon – to materialize.

By: Corey Rosenbloom

Corey Rosenbloom — Tue, 10 Mar 2009 01:32:07 +0000

Dave,

There’s some interesting stuff and interesting inflection points on many markets right now – making forecasting difficult but the risk-reward ratios very favorable.

Feels like we’re at major inflection points where markets could turn sharply either way.