I think the chart of the United Stated Oil Fund (ticker USO) speaks volumes. Figuratively and literally
I was thinking about putting this chart on my volume off the high list, but reconsidered as it did not readily meet the criteria. That said, the action in the fund (and light sweet crude in general, which can be found at stockcharts.com using the ticker $wtic) is suggesting that a large operator got wind of some potentially bearish news. Over the last day or two, I have seen a list of whos-who in excuses as to why crude is lurching down including the possibility of a release from the strategic reserve, an acceleration of the global growth slowdown, poor PMI figures, flailing industrial statistics out of China, high inventory levels, etc. Whatever the actual reason, we are unlikely to know it until after the fact or at least most of it is reflected in the price.
The price/volume action in the above chart suggests to me that the USO (light sweet crude) will come into the $33 level, if not retrace most of the rally that began in late June. If the later scenario plays out, we could see the USO trading below the $31 level. The before mentioned price points would correspond with light sweet crude at about $87 ($33 on the USO) and a point below $85 ($31). The USO closed at about $34 and light sweet crude closed at $92 in Wednesday's trading.
I was thinking about putting this chart on my volume off the high list, but reconsidered as it did not readily meet the criteria. That said, the action in the fund (and light sweet crude in general, which can be found at stockcharts.com using the ticker $wtic) is suggesting that a large operator got wind of some potentially bearish news. Over the last day or two, I have seen a list of whos-who in excuses as to why crude is lurching down including the possibility of a release from the strategic reserve, an acceleration of the global growth slowdown, poor PMI figures, flailing industrial statistics out of China, high inventory levels, etc. Whatever the actual reason, we are unlikely to know it until after the fact or at least most of it is reflected in the price.
The price/volume action in the above chart suggests to me that the USO (light sweet crude) will come into the $33 level, if not retrace most of the rally that began in late June. If the later scenario plays out, we could see the USO trading below the $31 level. The before mentioned price points would correspond with light sweet crude at about $87 ($33 on the USO) and a point below $85 ($31). The USO closed at about $34 and light sweet crude closed at $92 in Wednesday's trading.
No comments:
Post a Comment