Saturday, November 03, 2007
Long time readers will recall my short oil call from the Spring. Suffice to say it was not a money maker but not nearly as disastrous as other weekend poster's picks namely VDSI and VLCM.
The technical evidence suggests a potential double top in the XOI - otherwise known as the Amex Oil Index. With oil prices approaching $100 a barrel, one would expect the oil stocks to be charging ahead. That is not the case thus far.
To illustrate, let's take a look at a point and figure chart. For those of you unfamiliar with how point and figure charts work I will give you the quick and dirty. Essentially, they are used to illustrate the supply:demand dynamics of a security using X's and O's to determine if the bulls or the bears are in control.
X's are used to illustrate when the bulls are in charge and O's are used to illustrate when the bear shitters in charge. Buy/sell signals occur when a previous column of X's or O's is exceeded. A 3-box move in the opposite direction of the current column triggers a reversal. Currently the XOI is on a sell signal as illustrated by the most recent column of O's which broke below the prior column of O's which reversed at 1470.
Potential top or pause in an existing uptrend? We will further dissect this index and some specific names tomorrow.
Battle of the yutes is where its at:
Kidstock 1, Danny - yet to take a swing/swipe
the crowd is breathless
However, come to think of it, perhaps we would have been better off had we left Louisiana to the hurricanes anyway...
Mdawsz - no more options for this recovering addict. Otherwise, I have to check myself back into rehab per the order of The Tuna Can.
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