Today's chart is best demonstrated through PnF.
I recently remarked that the $10 drop in oil suddenly was a bad omen. Usually when there is no reason that is a bigger problem. Well, today oil is letting go but the TSX Oil and Gas stocks are holding in line or only down 1.2% while oil is off 3.6% and Natgas is down hard as well. Some firm conviction on the stocks.
The Chart above has the most activity at the $36 or $37 level. Looking left you can see that is where the majority of boxes filled in are. You can see that the O's have been getting a little weaker each year. Support (bottom of the O's ) was at the $32 level, now it is down to the $30 level. That will be a major checkpoint for oil on USO. In the $WTIC Commodity I think the number is $76.
Some firm money holding long in these trades. If $76 breaks that will trigger a truckload of stops so the market will defend that level if not higher.
I am watching oil and Gold as a package here. There is some serious weakness underlying this $WTIC move. If Gold and copper start to leak, I'll be very hesistant.
As a footnote, I noticed it has been a year already since I started blogging. I hope you enjoy the blog and feel free to respond to what you read. I got quite a few responses to yesterdays blog. I enjoy getting them as well. Some require no comment, some do.
Good trading,
Greg Schnell, CMT
