Schrödinger's Persian Cat
Eyeing energy and potential moves
By itself, the monthly chart of XOP is about as bullish a chart setup as one can hope for. There is a bit of symmetry too back in 2015. Each spot is a bit higher on the right side. Next move would be a breakout beyond $250, were it to unfold.
It all depends on the Iran war and related geopolitics. The point here is not what will be. There’s no crystal ball or tachyons or anything else. We’re look at potentiality. I don’t like the chart either. From an economic and social standpoint, it’s almost “cancel your vacation plans” and “prepare for communism.” This is a disaster.
The monthly stochastic is close enough to overbought to worry about, but it is not up there.
Not going to do the double-think. Maybe it looks like this because investors worried about Iran are pumping up energy again. One can hope.
FCG doesn’t look as good in the stochastic, but it is coming out of oversold on the weekly.
SD daily has a H&S look to it, but not a clean pattern.
I pulled up TLT and had it unadjusted, giving me a shock. Ignoring dividends, it’s trading close to its all-time lows. This is reflected in the yield charts, here represented by the more important 10-Year Treasury yield.
Unlike silver last year, there isn’t a base behind the base. Crude oil doesn’t look as good as silver did last year. It’s also wholly at the mercy of geopolitics in the short-term.
USO, worse performer than crude, has a bullish base.
Given the geopolitics involved, it’s a gamble.
From the bear side, who cares? If the market is going down, oil going up ensures it. Oil going down won’t produce much of a market bounce because there hasn’t been much of a drop in response to renewed fighting. Earnings later this week are a larger short-term threat to SPX and NDX bears.
From the bull side, that is going long energy, it’s riskier. Natural gas is bombed out though. They may trade lower in sympathy, but there’s no run-up in natural gas that will fizzle.