and The Candlestick Forum
Oil has reversed from the minor pull back that has been in place for the last few weeks and turned sharply back up, as expected. The case for the corrective uptrend in Oil just gets stronger and stronger. If Oil takes out the last high of $42.63, look out, it is going to get very interesting. All three Oil trade ideas that we suggested; WLL, USO and TOO still look strong.
The weakness in today’s trading in the markets was in the realm of high probabilities based upon the Dow closing below the T-line on Tuesday. That was the first indication the sellers had picked up enough strength to breach the T-line trend, which had been acting consistently for the past month and a half. Specific sectors continue to act well, such as the gold sector. Start moving money out of charts that are beginning to show weakness and moving to stronger sectors, as well has having some short positions in the portfolio.
Oil has rallied for the last 3 days. We hope that it continues up and puts in a new high. But, hope isn’t a trading strategy, so we’ll have to see what the reality is. It isn’t all based on hope though, the bullish pattern that Oil is showing is grounded in solid technical analysis and the hypothesis for a recovery has not yet been disproven. The trades that we called out on; WLL, USO and TOO are still looking good, if you buy into the Oil recovery scenario. In the video we review the specific entry, stop and target levels for each of these trade ideas. We’ll provide the next update after the close on Friday and the picture should be clearer then.
Stay tuned…
There is one evident factor occurring in this market trend. Although the indexes have been moving up in a slow and steady fashion, numerous candlestick pattern breakouts have been producing excessively strong profits. This is the advantage of recognizing patterns. The results are usually much stronger than merely a slow steady uptrend and move. Continue to stay long until you see a definite sell signal. The T-line continues to act as a viable trend support.
Oil has been dropping for several days now. The thesis for a Bullish recovery in Oil is still intact. It would have to go put in new lows before we could say that there is no recovery and new lows are a long way away from current prices. Patience, resolve and discipline are the keys, once again, as we let the market tell us what it is going to do. It will!
Stay tuned…
April 8th Daily Market Comments
Which direction is the market trend? When the market does not know, that means there is a definite change of investor sentiment occurring from the previous trend. Although the markets are trading back accessibly positive today, continue to be alert. The whipsaw action in the indexes over the past few trading days illustrates what a Doji illustrates in one day, indecision between the Bulls and the bears. Be careful, have both long and short positions in the portfolio, utilizing the T-line as an important trend factor in either direction. The gold and oil sectors remain strong bullish sectors.