Both stocks and gold often rally strongly together. It has happened numerous times in the past, on all time frames. The stock market “crash talkers” are praying for stocks to crash, and let’s hope they’re finally right, because it would be a magnificent buying opportunity, likely in many markets at that point, including possibly gold itself.
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.
8 Comments
Hi Scott Great analysis, as usual. What are your thoughts on the Crude Oil market right now, considering the upcoming OPEC meeting and proposed extension? The market’s response to the news of the 9 month extension has been relatively muted I would say, but some pundits are calling for WTI at $60 in no time already. Last few days the price has risen on the news of the extension, but on reduced volume – is this a bull trap in the making? Thanks Chris .
OK Chris. You’re right about the pundits. My original belief was a bounce in early May, with commodities in general. The $ selloff has helped the commodity rally. So here’s the crude chart I’ve been running this year, with the accumulation support area, and then the “break of support” with the excellent volume. I was anticipating a low in that area, but the volume surprised me. Something else is going on with this thing. That’s why I was saying the “legitimate bounce in crude”, instead of my original expectation of a “bounce”. And on a 60 minute, the daily can be a little weird on commodities, with the nice action below support. Over the next week should be a topping area, and if they wanted to do a bull trap, they’d want a quick selloff to set a good resistance, and then spike it thru on the way back up. Basically the reverse of the bear trap (spring) recently. Two other things/observations – the energy shares are lagging badly, and junk bond strength is supportive. But that is going to be the huge problem going forward, as I’ve written about this several times, the “fracking miracle” is nothing more than the “miracle” of zero/low interest rates. Fracking/drilling is very capital intensive, and when the rates start the next push up, likely in the second half, that is going to seriously wound the “fracking miracle”. It won’t kill it, and I’m slowly compiling a list of frackers to watch for over time. but we need the rate rise first. I have continued to hold off with the frackers until the rates kick in. Which of course, then what about the effects on crude. Almost everyone is extrapolating fracking supply to infinity.
OK Chris. And the other part of this is there are several prominent gold permabulls who are wildly bearish on oil, and it’s really weird their theory – it’s like a new spin on peak oil. And it’s going to cause everything to “crash”, except for gold and silver of course. I make my mistakes in markets, but these guys are absolutely horrible with their stock market crash calls for years, and they’re arrogant about it also, and now it’s oil. I guess because their stock market thing didn’t work too well, so they decided to move on to crude oil. Well anyway, food for thought with these guys.
Yes, Looking for an ending action at or below $10.70 maybe down to the next support at $10.50? Might be a big of a move for today but at least the wave will be left translated.
Yes we actually had EA on 5/18 and at the open today on less volume. So a rally to set this support, and then another selling wave to run some stops. People want to feel comfortable about a support area, the big guys know it, so they try to set that area, and then scam people into setting stops right there. At a minimum, it’s good for a bounce. It’s in one of those AMD videos, but the action in early May around $10 was pretty bullish. It should be a good trading stock one way or another.
Hi Scott
Great analysis, as usual.
What are your thoughts on the Crude Oil market right now, considering the upcoming OPEC meeting and proposed extension? The market’s response to the news of the 9 month extension has been relatively muted I would say, but some pundits are calling for WTI at $60 in no time already.
Last few days the price has risen on the news of the extension, but on reduced volume – is this a bull trap in the making?
Thanks
Chris .
OK Chris. You’re right about the pundits. My original belief was a bounce in early May, with commodities in general. The $ selloff has helped the commodity rally. So here’s the crude chart I’ve been running this year, with the accumulation support area, and then the “break of support” with the excellent volume. I was anticipating a low in that area, but the volume surprised me. Something else is going on with this thing. That’s why I was saying the “legitimate bounce in crude”, instead of my original expectation of a “bounce”. And on a 60 minute, the daily can be a little weird on commodities, with the nice action below support. Over the next week should be a topping area, and if they wanted to do a bull trap, they’d want a quick selloff to set a good resistance, and then spike it thru on the way back up. Basically the reverse of the bear trap (spring) recently. Two other things/observations – the energy shares are lagging badly, and junk bond strength is supportive. But that is going to be the huge problem going forward, as I’ve written about this several times, the “fracking miracle” is nothing more than the “miracle” of zero/low interest rates. Fracking/drilling is very capital intensive, and when the rates start the next push up, likely in the second half, that is going to seriously wound the “fracking miracle”. It won’t kill it, and I’m slowly compiling a list of frackers to watch for over time. but we need the rate rise first. I have continued to hold off with the frackers until the rates kick in. Which of course, then what about the effects on crude. Almost everyone is extrapolating fracking supply to infinity.
Thanks Scott
OK Chris. And the other part of this is there are several prominent gold permabulls who are wildly bearish on oil, and it’s really weird their theory – it’s like a new spin on peak oil. And it’s going to cause everything to “crash”, except for gold and silver of course. I make my mistakes in markets, but these guys are absolutely horrible with their stock market crash calls for years, and they’re arrogant about it also, and now it’s oil. I guess because their stock market thing didn’t work too well, so they decided to move on to crude oil. Well anyway, food for thought with these guys.
Oil moving up NG moving up, producer’s nada.
Let me know when you stop plunging AMD so I can put a bid in;)
just covered more, small position left. I’m sure too early. You’re looking to front run?:)
Yes, Looking for an ending action at or below $10.70 maybe down to the next support at $10.50? Might be a big of a move for today but at least the wave will be left translated.
Yes we actually had EA on 5/18 and at the open today on less volume. So a rally to set this support, and then another selling wave to run some stops. People want to feel comfortable about a support area, the big guys know it, so they try to set that area, and then scam people into setting stops right there. At a minimum, it’s good for a bounce. It’s in one of those AMD videos, but the action in early May around $10 was pretty bullish. It should be a good trading stock one way or another.