Keeping Tabs on Crude
posted Jun 4, 2006 at 12:02AM
Well it has been a bit over a month, and the crude price remains above the break-out level. It will take a move over $75 to really start talking about this move being a part of a major impulsive leg, instead of a running correction.
One aspect that has improved has been the CRUDE COT DATA.
Although hardly bullish, I am breathing a little easier to see that the commercials have drastically reduced what was a significant short position. Even if crude broke back down below the break-out point, it would seem that by the time crude got back to major trend-line support, the commercials would most likely be back at a net long position.
Given that the "things" sector has been under a lot of pressure, crude oil has held up quite well. As I have mentioned before, work from McClellan shows that crude has a tendency to lag gold. As such I think it will out perform. If I remember he was calling for the upleg to really get going in mid to late summer.