A Lack of Energy in Energy

Oil has been challenging. It started off this year with a really clear bullish corrective wave, but pulled back this summer pretty dramatically. That pullback went to the extremes of an expected Fibonacci retracement and then it looked like the bullish move up was back on track. The last few weeks have seen another sharp drop. We are at a critical level now, right at the edge of Ichimoku Cloud support. If price breaks down through that support, then the overall thesis for an Oil Recovery might be wrong. We’ll know soon. I’m not taking any Oil related trades until the picture gets clearer.

The recovery in Natural Gas is stronger and clearer, but we are in a bit of a complex correction right now. We are above the Ichimoku Cloud and as long as we don’t break down through it, this recovery is still looking good and the price target is still above ~ $3.409.

As the Natural Gas recovery began, back in late June, we called out a trade on WMB at $22.25. This has been a great trade and price is now at $28.05 and we moved our stop up three times and it is now at $25.02, well above the entry price, so we have a winner, the only question is how big?

That’s it for this update. Stay tuned and I’ll continue to give updates- and hopefully we start to see a bit more “energy” in these Energy related commodities.

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.