Crude Oil Update
posted Apr 8, 2006 at 01:16PM
The price is for all intent and purposes at trend-line resistance, so what happens over the next week or two will start giving us some clues of where the complex is at.
Can it break through from up here? There is nothing "technical" to stop it. The charts are hardly overbought so there is definitely room there.
The COT data shows that commericials are net short, but not to a large degree...certainly not what have you seen in past IT tops.
I am still of the mind that we are in a consolidation pattern of high degree and that one more down-leg into trend-line support is in order.
Most vehicles in the "things" sector are screaming for some kind of retracement, so oil could retrace in sympathy.
I have been raising some cash over the past week, selling gold trading positions, and some energies, but I continue to hold my oil sands stocks, which, as a group, are all still in consolidation patterns and which offer the best possibilities for "new" money.
It would take a 3 day close over 70.45 to even start considering a triangle break-out. More realistically it would take a 3 day close over 72.45 to signal the start of a new impulsive leg up. (72.45 is 3.5% over past highs).
There are at this time many possibilities, even within the realm of consolidation patterns so it is basically a case of watch and shoot.
I am not doing any "trading" per say. I continue to hold long standing positions in oil sands juniors. Whereas a lot of "things" are overbought, these are in bullish, consolidation patterns, so I think these will be more attractive to traders with cash to put to work.