Category: Commodities

Crude Oil Testing Appetite of Long Term Bulls

After falling more than 11% in the first 3 weeks of March, crude oil finds itself re-testing a rising multi-month trendline extending back 12 months to April of 2016.

Image Crude - Crude Oil Testing Appetite of Long Term Bulls - The Trade Risk

Short term momentum remains lower in the black liquid, and therefore caution is advised, but be aware longer term dip buyers could start picking away around this 47 area.

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Energy Stocks Test 10 Month Rising Trendline

As crude oil tumbles lower -4% on the day, the SPDR energy sector ETF $XLE is also getting hit hard, down -2% to the round 70 price tag.  Energy XLE ETF - Energy Stocks Test 10 Month Rising Trendline

This area will be key to pay attention to as it coincides with a 10 month rising weekly trend-line that has supported price since March of 2016.

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Crude Oil and Natural Gas Nearing Inflection Points

Equity markets ripped to new time highs today across all of the major averages, but that’s no longer impressive, that’s an every day thing.

It was commodities that were interesting today, specifically crude oil and natural gas nearing inflection points.

We’ll look at crude oil first, and we can see on the chart below that bulls are trying to break us out above multi-month $54 resistance level.

Chart 1 - The Trade Risk Evan Medeiros Swing Trade Alerts

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Crude Oil Looks Ready to Breakdown

Crude oil has gone nowhere over the past 10 weeks.

We’ve been discussing the potential for a breakout trade in our market recap videos for the past several weeks as we’ve seen it coil up and trade in between this $52 to $54 range.

Today, we finally saw some range expansion to the downside as we broke and closed below this trend-line extending from the January 2017 lows and on an uptick in volume.

Image of WTIC - Crude Oil Looks Ready to Breakdown

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Silver is Breaking Out to The Upside

Silver has been in a steady downtrend since peaking last August of 2016.

Over that 5 month period since the peak, silver lost about 25% of it’s value trading down to 15 in the $SLV ETF.

But ever since the new year we’ve seen this metal begin to recover from those lows and it’s now up +10% for 2017.

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Crude Oil Bulls Remain Resilient Near YTD Highs

Just 1 month ago in mid November crude oil $CL_F was trading down around $42.50 at multi-month lows and threatening to break down further.

Since then, we’ve seen a  powerful 20%+ rally breaking us to new YTD highs and above key prior resistance.

Charting $USO, we’ll lose some precision due to the ETF structure, but the resiliency of oil throughout the month of December can still easily be seen.

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Crude Oil Bear Flagging Above Support

With the gap down today in $USO back to yesterday’s lows the bulls are now pinned against a major prior support level with declining moving averages sharply headed lower just above price.

uso_11_10

We hold no position at this time, but we’re watching the development here at this inflection point to see if support continues to hold, or if the bears are going to continue their October trend lower.

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Taking The Loss In Natural Gas

Natural Gas $UNG was a weekly breakout trade that we initiated long back on October 7th, 2016.

ung_weekly_entry

We took our entry as price surged above multi-month resistance of 8.75 and closed strongly on the week and saw a nice expansion in range.

We had some initial follow through the next week, but not enough to tag our first profit target which was roughly $10.

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