Sunday, March 27, 2022 12:44 PM EST
Crude oil investors better pay attention here. Whenever a market prints a ‘wick’ on the longest timeframe, the monthly chart, we know that it may be a serious turning point. A few days before the end of this current month we see a pretty dramatic wick on crude oil’s monthly chart forming.
We are certainly no experts in the crude oil market. It’s such a heavily manipulated market, and the crude oil chart tends to be so choppy (most of the time) that we are not too focused on the crude oil market.
However, if there is anything that all markets have in common, manipulated or not, choppy or not, and volatile or not, it is the turning point characteristics. That’s what we are most interested in. Here is the rule of thumb: the longer the timeframe, the more important a turning point characteristic will be.
Crude’s monthly chart, as shown below, has a pretty dramatic rejection right below its all-time high. Moreover, and more importantly, this month’s closing price will be pretty crucial. In case crude cannot close above the horizontal line on our chart, we believe it will have a really tough time clearing the all-time high.
What are we watching for confirmation of a ‘turning point?'
- Monthly closing prices: Below $116/barrel would not be promising.
- Timing axis: Crude futures went below zero mid-April 2020, we will be looking for confirmation whether crude is completing a 24-month cycle in April of 2022.
While crude oil was an amazing investment in the last 24 months, we believe the upside potential might be limited in the short- to medium-term. There were much better opportunities out there, is what we are thinking.
We have no exposure whatsoever in the oil and gas market. In our Momentum Investing portfolio, we ...
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We have no exposure whatsoever in the oil and gas market. In our Momentum Investing portfolio, we opened positions in undervalued and promising ‘clean energy stocks.’ We are also very focused on what we believe is the most undervalued market (silver).
Moreover, in our automated trading services, in which we trade the S&P 500 for our members, we continue to accumulate profitable trades, largely outperforming the vast majority of market participants as well as leading stock indexes.
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I disagree. The Ukraine disastrous effect on Russian supply, #Bidenflation, North American Gov't synch'd anti-oil development policies, Global post Pandemic demand increases, ineffectual energy alternatives and more are huge factors affecting the oil market now in ways that I seriously doubt a chart analysis tool can appreciate. The experienced #oil people I get feedback from have expectations for a very tight oil market into next year.
My gut feel tells me that $100 wti is probably where things will sit once all the pieces fall into place in this complex yet simple puzzle. It's simple because ultimately everyone still needs oil and oil underpins every modern economy on the planet.