Energy: Next Big Mover
I think the big moves in the next month or two will be in the energy sector as oil starts a new intermediate degree rally. The metals may be stuck in a consolidation for awhile as gold works up enough energy to break through the resistance around 1380-1400.
Look for oil to regain $60, $70 and maybe $80 during the second half of the year.
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Gary, what I have really taken from u recently is how patient you are when waiting for ICL’s and DCL’s. Its something we all have to learn. Yes we could get our feet wet with oil at the moment but as you say we may get a lower low as the SM is due for some profit taking any day now. The RIGHT strategy is to wait for a swing – something which many traders myself included. have to learn. Yes the low could be in in oil and one could miss the move up but because all the ducks are not lining up, Gary doesn’t want to take the trade.
What will you need to see to call a swing? even if the SM does lose 60-100 points?
Gary I respectfully disagree. I would love to see oil go into the 70-80’s as i work in the industry but I’ll bet you a burrito that we end the year less then $60. I thought you said not to trade off of chart patterns as they are unreliable.
I’ll take that bet. I’m not trading off chart patterns. I’m trading based on the intermediate cycle and sentiment, The head and shoulder bottom is just a nice confirming pattern of what I already expected.
What literally everyone is missing is that the global economy is set to explode higher. Demand is going to surge, along with currency debasement that will push oil higher.
We just got what Armstrong calls a slingshot move in oil that gets everyone on the wrong side of the market and convinces them that price should stay low despite price rising (traders get stuck in the perceived fundamentals). It’s a very powerful pattern that will generate lots and lots of fuel because everyone will fight the trend for a long time.
Well I really hope your right as I will graciously love to owe you a burrito. I really don’t put any weight into what Armstrong says.
Oh I think Armstrong is definitely running a scam with that Socrates nonsense. I’m just saying that what he describes as a slingshot move is unfolding now in energy.
Read this comment about oil today on Seeking Alpha that is spot on with what Gary is saying:
“Fundamentals are actually incredibly bullish, just not the ones dumb money looks at. And it’s only dumb money that react to talks of OPEC meeting. They are on a de facto freeze, because other than Iran, they are all pumping at full capacity, and Iran would need significant outside investment – that’s not going to come before their elections- to increase output. The meeting is a non-event. But this fear around a rig count that increases in the single digits is silly. Shale wells have an incredibly short life, mostly tapped out within a year. So without constant drilling, inventories deplete rather quickly. We should all hope for these modest rig count increases to continue, or we are going to end up with an economy stalled by incredibly expensive oil. September is the month where some large draw downs and revisions will hit inventories. Simple economics still work.”
OK but I also know that there 1000’s of shale wells drilled but not completed. As soon as the price get to $50 they will complete them in short order to bring on more production. Generally a shale well flows good for the first year and your right it drops off but it will still produce a decent amount of oil for many years. That’s the nature of shale wells.
Aug 09 Gold Stocks Versus Bullion: Inflation 101 Stewart Thomson 321gold
GDM is in consolidation too? Today trade with DUST is a opportunity?
Yes to waiting for ICL, DCL, HCL. Great long trades are born out of these swing lows.
Interesting well written article by Gaill Tverberg just posted 8/10 on Korelin.. regarding oil…energy.
the only BIG move will be to the downside by year end 2016 .. certainly NOT $80.
Question is to buy oil itself or oil stocks
or to buy both..