What’s The Deal With Oil?

With the market trending up since the beginning of the year (S&P 500 is nearly +7% YTD), Treasuries & Gold on the verge of a sell-off, and the Yen craziness, little attention has been paid to oil. While mention of gas prices are always evident, as WTI Oil ($CL_F) gets close to $100, I just have not seen any declarations of $200 oil like I have in the past. That might have to do with the fact that the US is getting more “energy-independent” by the day (via the shale revolution) or it just might have to do with the fact that other asset classes are taking up all the headlines. I don’t know, and frankly, it doesn’t matter too much.

But what I do know is charts, and oil is setup for a move in the near term.

The Chart

$CL_F – Light, Sweet Crude Oil Futures (Monthly)

I want to take at a super-long term chart before getting down to the daily. Here is the monthly chart for WTI oil. As you see, there is an ever-increasing symmetrical triangle/apex forming. We’ve had lower highs but also higher lows. This is bound to break way way or the other eventually.

(Click the image to embiggen) 

WTI oil Monthly











Now for the daily. This is what I’ll be watching for in the following days/weeks. As you see, we have formed a nice little tight range between 95 & 98. A break below 95, and I’d expect oil to trade quickly down to 90. Above 98, naturally, I’d expect a test of 100.  Yes,  Not much to either side, but I wouldn’t expect a big move until the above apex actually breaks.

Right now, I’m thinking it breaks to the downside because of the potential double top pattern that’s forming. However, I have to respect the consolidation its been in after having a decent move (~14%) from the December 2012 low.

WTI daily



















The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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