Intelligence, Market Timing, And Trading Strategy For Traders and Investors
Oil And Commodity Summary:
Oil Stocks Refuse To Crack
December crude remained near $75 while the Amex Oil Index is still within striking distance of its all time highs.
Thus, despite the recent pull back in oil, it looks as if there are enough traders out there that are willing to support the energy market.
Most interesting remains the relative strength in shares of Exxon Mobil and Chevron Texaco, two majors with significant amounts of natural gas exposure.
Oil supply data will be out on Wednesday, and natural gas supplies out on Thursday. Those could be market moving events.
Oil supply data last week showed a surprise rise in gasoline supplies, also hitting the energy markets.
The $80 mark for crude oil looks like a distant goal for oil bulls at the moment, barring an escalation of the Middle East conflict, or another external event such as a major hurricane hitting the Gulf as happened last year.
Prices remained above $70 per barrel overnight. This is a key support level.
If crude oil prices can climb and stay above $80, though, for whatever reason, we could finally see that melt up in prices that has been predicted for some time.
Any mechanical failure at any key refinery, transportation, or production facility, could trigger a significant increase in prices.
Natural gas, is still trying to stabilize near the $5.50 area in the nearby contracts, but is having difficulties rising above the key level.
The Philadelphia Oil Service Index (OSX) is also trying to find support. The index sold off aggressively on 7-20 and on 7-21, moving back below its 200 day moving average. Key resistance remains above the 210 area.
The Amex Oil Index (XOI) has also been volatile. This has been the strongest sector index in the energy complex, but also pulled back on Monday.
Are You Ready If The Stock Market Takes Off? Risk less and make more with the new how to manual on getting started in futures trading. Dr. Duarte's New Book "Futures And Options For Dummies" (John Wiley & Sons) has an excellent section on oil futures as well as the currency markets, while covering and expanding on the successful strategies in Doctor Duarte's other books. Order your copy today.
