Has Oil Bottomed? 6.21.17

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EOM Q&A: Has Oil Bottomed?   6.21.17

Previously, I planned to revisit our High-Dividend CEF plays. I am putting it on hold until after the Q2 High-Dividend Fund White Report is released next week. 

My goal; have Garden Growing training III finished by the end of July. Why? In case the five-year seasonality cycles hit again this year. Review yesterday’s post for details. 

Today I answer your question, has Oil bottomed? The rest of the week I plan to review previous Simple Simon scan candidates to see if they ended in the red or the green. 

To answer, let’s review the $WTIC chart I designed for an interview in early June.

Key Points…
1.   Top Box-WTIC is not trading opposite of the US Dollar
2.   Second Box-WTIC is trading with an inverse .77 correlation to the SPX
3.   Main Box-see (A) last June the price dropped 24%. A 24% drop from the most recent high in January would take the price down to $42
4.   Fourth Box-XLE hard support ($63.37) is highlighted
5.   Bottom Box-although today’s volume is high-I do not see capitulation

Action Points…
1.   A 24% drop from the most recent high in January is around $42
2.   Next levels of WTIC support are $41 then $39.19
3.   Previous runs off support were 14%, see March and May 2017. A 14% run from $42 support takes the price to $48
4.   Go to your Playbook 2016 (file E A4) for Energy fund plays and (file H HA 1&2) for leveraged plays 
5.   Identify candidates and set alerts on all candidates
6.   Develop patience and wait for Simple Simon Signals before entering
7.    If trading leverage, tight stops are a must 

My answer to your question if Oil has bottomed is no.  After a possible bump at these levels, I see a test to $40 and below.

Tomorrow, we analyze the chart for SHOP that hit our Simple Simon long scan in early January. 

Enjoy your evening!

David O. England 

Plan your work, work your plan, and share your harvest! 1 Timothy 2:1-2

This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.

DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.

If you have a question or comment, contact David England at eyeonthemarket@outlook.com


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