It’s Not Over for Crude Oil Yet

The pullback in Crude Oil has been step and deep, but our thesis for an overall recovery has not been invalidated yet. We’ve gone just below an expected Fibonacci retracement level of between 38.2-61.8%, but as long as it stays above a 76.4% level ($39.42 on the futures contract) then we are OK and should expect a reversal up soon.

Natural Gas is much clearer. In the last update we predicted support between of $2.642- $2.582 and that level held and price is now trending strongly upward with Fridays close at $2.876. All signs point to Natural Gas hitting our target zone of $3.409 – $4.318.

We had called out an entry on WMB at $22.25 and so far, this is looking like a great trade. Fridays close was $23.97 and good entries are still possible for this trade. Stop is still at $19.67 and target price is ~$34.00.

That’s it for this week. I will keep the updates coming. Be sure and let me know if you have questions or comments.

Thanks!

Dean Jenkins

MBA from the University of Washington. Dean is an expert in Technical Analysis, Money Management, Elliott Wave Analysis and founder of FollowMeTrades.com.

 

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July 28th Daily Market Comments

The Dow and S&P 500 have now pulled back to where they are trading below the T-line again. The NASDAQ continues to show strength, at least not any great selling influence. The Dow and S&P 500 have been showing bearish sentiment, although relatively slight, over the past five or six days of trading. A close below the T-line today would be strong evidence that the pullback might be continuing with more enthusiasm. Be prepared to take profits on long positions. Having a few short positions in the portfolio with the market conditions showing tiredness is viable.

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July 27th Daily Market Comments

After a few days of consolidation, yesterday the Dow formed a Doji/hammer signal right on the T-line. For the slow bullish uptrend to remain in progress, today’s trading needed to see a positive open and positive trading, continuing to keep the Dow trading above the T-line. It would not be good to see the Dow close back below the T-line today. A possible warning flag is seen that the NASDAQ has gapped up in the overbought condition. This is usually the candlestick chart conditions to start watching for a possible reversal/pullback in the markets. Continue to stay long but be aware of whether the markets can push higher. If trading languishes in this area for most of the day, be prepared for some selling in the next couple of days.

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July 26th Daily Market Comments

The T-line continues to act as a relevant indicator, showing the trend remains bullish. Each day continues to show one index not moving very much while another index trades slightly positive, merely indicating the movement of funds from one sector to another. The analysis remains simple, as long as the indexes are not showing sell signals and trying to close below the T-line, the slow steady summer uptrend remains in progress.

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July 19th Daily Market Comments

Today’s lack of conviction in the markets continues to reveal consolidation/profit-taking after a nice strong bullish move over the past four weeks. Be prepared to take profits on confirmed sell signals. However, numerous bullish charts are not showing any strong reversals, merely sideways consolidation. Candlestick charts allow investors to visually witness when the selling has definitely taken control. Until that time, hold long positions.

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July 18th Daily Market Comments

The NASDAQ is showing good strength today, potentially forming another little J-hook pattern to the upside. The Dow and S&P are also trading positive but not with any great strength so far today. Although the uptrend remains in progress, there still remains signs of a possible profit-taking reversal. The gap up in the indexes on Thursday, as well as moving away from the T-line in the overbought condition, makes the prospects of a reversal more likely. Continue to stay long but be prepared to take some profits on signs of weakness in the market.

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Crude Oil and Natural Gas at Important Levels

The Crude Oil chart is following a textbook pattern right now. 10 days ago, in my last update, I said that Oil was in a small correction and projected that it would get down to ~$45.50 – $41.50 before the next impulsive wave up begins. It made it down to that level and is sitting right on the bottom of the Ichimoku Cloud, which should provide some support. Then next move up hasn’t started yet, but it could at any time and we will have plenty of time to see it happen and be prepared. When it does start, I’ll give another update and will include some trading ideas.

Natural Gas is still in an uptrend. It has pulled back just a bit, which is normal. I am looking at an initial support level of $2.642, and if that fails, then major support at $2.582.

In the last update I pointed out WMB as a potential trade to play the Natural Gas recovery. I said that if WMB got up to $22.25, I thought that would be a good long entry price. It did hit that level and is now sitting at $23.24. I have a stop at $19.67 and a target price of $29.07. Entries are still possible on this trade at this time. It may pull back a bit, but it has what looks like good support from the Ichimoku Cloud well above the stop price.

That’s it for this week. I will keep the updates coming. Be sure and let me know if you have questions or comments. Thanks!

Dean Jenkins

MBA from the University of Washington. Dean is an expert in Technical Analysis, Money Management, Elliott Wave Analysis and founder of FollowMeTrades.com

 

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July 14th Daily Market Comments

There is a warning flag today. Where do most people buy? They buy exuberantly at the top. Exuberance can be illustrated with a gap up in the overbought condition. This is what has occurred in the Dow and the S&P 500. Does this mean the uptrend is over? Not necessarily, but be more diligent as far as watching for the selling/sell signals. Continue to stay long but be prepared to take profits if today’s strength starts dissipating.

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July 13th Daily Market Comments

The indecisive trading in the markets this morning is not unexpected. Wave three is now approximately the same length as wave one of the Dow’s J-hook pattern. The indexes have moved away from the T-line, creating the expectation of some consolidation. The markets could move sideways or pullback until the T-line catches up. Expects some profit-taking in this area.

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July 12th Daily Market Comments

The uptrend/J-hook pattern continues in the market indexes. Today’s trading currently demonstrates a solid day in the Dow, S&P 50 and the NASDAQ. The most compelling chart today is the transportation index up, up strong and forming a Doji sandwich, illustrating the 200 day  and 50 day moving average are not acting as a resistance level. Continue to stay predominantly long but expects some profit-taking with the indexes moving away from the T-line.

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