Volatile Oil

The Light Crude Continuous Contract fell from $ 67.70 a barrel on Monday to $ 62.75 on Thursday, closing at $ 65.79 on Friday. Consequently, stocks followed the sharp move in oil prices last week.

The first graph is a OIH (basket of stocks) daily chart, which suggests a consolidation or correction in the coming weeks. The price-per-Volume bar (on the left side of the graph) shows may sell between 111 and 114 in the short term. OIH to There is also resistance around 115, that is to say, the 10 and 20 day MAs. There is further resistance at 117.88, which is the current Parabolic SAR sell signal (red dots). However, if the oil tests $ 70 per barrel, then it is high at 119.30 is another barrier. Oil is less than $ 5 per barrel below $ 70. So, OIH rise and fall quickly.

OIH important support to the (rising) 50 day MA, currently just over 108. However, if less than 50 days, it closes OIH MA, then the next important aid is about 105, that is to say, the longer Value-by-volume bar. Around 105, the bottom of the consolidation zone, while a correction somewhere in the 90s and 80s. The short-term price of oil is largely dependent on the pace of global economic growth, according to the monthly economic data, and supply disruptions, including geopolitical events and hurricanes in the Gulf.

The second graph is a SPX (S & P 500) over the same period daily chart. SPX lead OIH higher and lower than recently. If OIH remains SPX was, then OIH will rise next week, perhaps to the Parabolic SAR sell signal, trading around the 10 & 20 day MA, and then fall to a new recent low, eg 105. SPX created a bullish doji on the 50 day MA. However, a volatile trading to continue, probably between 1200 and 1235. Range next week

Next week is a light economic data week: Ma: No, di: Existing Home Sales, Wed: Durable Goods Orders and New Home Sales, Thu: Unemployment Claims, and Fri: Revised Michigan Consumer Sentiment. The weekly oil inventory report at 10:30 ET Wed. There are several other excellent opportunities for trading next week, where large profits can be made quickly. "Chance favors the prepared mind"-Louis Pasteur.

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Arthur Albert Eckart is the founder and owner of Peak Trader. Arthur has worked for commercial banks, eg Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds 1999-00. Arthur Eckart has a BA and MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.

Mr Eckart has to maximize a comprehensive trading methodology using economics, portfolio optimization, and technical analysis and minimizing risks developed at the same time. This methodology has resulted in excellent returns with low risk over the past four years.