econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 03 October 2016

Oil Is The Most Important Chart To Watch

by Pebblewriter, Pebblewriter.com

In our last update [see: Aug 30, 2016 Update on Oil] I noted that CL (Light Sweet Crude Oil Futures) had bounced prematurely, leaving the channel it had broken out of without a backtest. It was at 46.20 at the time.

pebblewriter380px

…the delay left the falling white channel without a backtest… To further complicate things, DX and USDJPY just broke out. Is it possible the yen carry trade is being resuscitated and CL will be allowed to decline further?2016-08-30-cl-daily-cu-1600

If so, then we’ll likely see it drop down to 43ish over the next several weeks (the red dot in mid-September) to tag the white channel bottom and, potentially, the white .618 Fib at 43.07.

As it turned out, the yen carry trade was resuscitated. USDJPY rallied over 4% between Aug 26 and Sep 2. This left CL free to decline without seriously dinging stocks.

CL did more than backtest the white channel by mid-September. It dropped through the channel top, tagging 43.07 (actually 43.00) only two days later. As expected, it got a tremendous bounce at that point - gaining 11% in the next week.

Not surprisingly, not one client complained that the forecast came together so quickly! But, the rapid rebound left me with a charting quandary. By coming when it did, the bounce left CL without a solid tag of the rising channel from Feb 11.

Fortunately, there was a solution: another tag on Sep 20 - this time at 43.06. By coming back for another swipe at it, the rising channel bottom was tagged, too. With that nicety out of the way, the next rebound was even more impressive: 13.8% as of earlier today, when it tagged our 48.64 upside target from last week [see: Don’t Worry, Be Happy.]

2016-10-03-cl-60-1500

For those who’ve played along in CL, congratulations. You’re up about 35% (unleveraged) in the past five weeks alone. This, on top of the 120%+ that came since our Feb 11 bottom call [see: USDJPY Finally Relents.]

For those who haven’t, I encourage you to give it some thought. Charting CL has been easier than charting equities - especially since I came to understand that CL was being used as a tool with which to drive equity algos.

With that said, let’s look at the path forward. Today’s high marked an incredibly important inflection point. Where it goes from here will likely be the most important determinant of equity prices for the remainder of the year.

continued for members

Click here to get access. (Last time offer for discounted charter memberships.)

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Big Mess in Italy
Are You Feeling the Economic Surge?
News Blog
Early Headlines: Asia Stocks Up, Oil Down, GOP Healthcare, Trump Not Reagan Redux, EU Ending?, UK Lost Decade, Putin Taking Over Mid-East, Yuan 'Flash' Crash And More
December 5, 2016 Weather and Climate Report - December Update - Zonal Prevails
Irish Births And Baptisms Visualised
What Happens In The Smartphone Afterlife
Water Intoxication: Are We Drowning In Advice To Drink More Fluids?
The Worldwide Virtual Reality Market Is Set To Be Huge
Average Gasoline Prices for Week Ending 05 December 2016 Rose Over 5 Cents
What We Read Today 05 December 2016
Why We Have Different Blood Types
November 2016 Conference Board Employment Index Improved.
November 2016 ISM and Markit Services Index Mixed
Are All Collateralized Loan Obligations Equal?
A Third Of Homes Sold For The List Price Or More In August 2016
Investing Blog
Momentum Issues A Warning
The Great Bond Crash Of 2016: 05 December Update
Opinion Blog
The Shale-War Is Over
Fake Science
Precious Metals Blog
Silver Prices Rebounded Today: Where They Are Headed
Live Markets
05Dec2016 Market Close: US Markets Close Higher, WTI Crude Settles At $51.09, US Dollar Drops Below 100 Temporally
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved