No Clouseau This Time
Last years runup was one of the all timers with the head of the CFTC inspector Clouseau "not understanding" how it could happen. That idiot of course was involved in classifying speculative funds as commercials allowing them to run the price. Thank God he demanded an investigation!
Here is how Texas Tee looks on a weekly chart. Notice how incredibly closely correlated to the Dow average this market is. This market has no historical basis for this, and in fact I did a comprehensive study on that relationship when I used to write my newsletter. I did it because I was so tired of hearing CNBC, one person in particular, explain equity swings based on the price of Crude Oil. Of course the study found absolutely no basis for this claim whatsoever. He is one of the hosts not a guest commentator, in all fairness to the guests.
Notice how well this market has followed the seasonal pattern, making the drop on schedule, then the low on schedule. We are due for a decline based on seasonals now. Also notice how well the commercials have done in picking buys on dips for us here since the low. All three red arrows spotted good buying opportunities for us when we were able to see they went long.
At this point this markets fate rests in the hands of the stock market. It has been lagging a little, but still almost moves up and down tick for tick with the Dow. I have been calling for a decline in stocks, so by association that would mean a decline here. I do believe that is the greater probability, but really do not see a trade opportunity here right now. If anything, the daily has buy signals right here. I am not taking them due to the seasonal down bias.
It is unclear here whether stocks will ramp up again, the recent high that was made if it were to get taken out decisively could launch the rock and roll show again, and this will likely get pulled along. If stocks do decline, this will likely go down. Big picture, I think Crude is going way lower than these prices before it is all said and done, but there is nothing to justify a trade right now.