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Crude
Oil [ http://www.buythebottom.com/wtic.html
] Looking back at the oil market, the commercial setup remains to the upside barring a new wave of commercial selling; so keep an eye out on this week’s COT data. On a shorter-term basis, the oil ETF (above) is displaying a bull-flag pattern. Confirmation of this pattern will take place when/if USO moves above the 54.5 – 55 dollar range. If oil indeed breaks out, this will – in my mind – confirm a bottom set around November 20th. If not, then we could expect another push down, perhaps re-testing the lows. Notice the green-arrows; each one represents a false-breakdown…which I find typical in a market that is setup to rally. This market has been setup for at least a month now, yet there is hardly any sign of a rally. In spite of this, keep in mind that patience is a virtue; a rally may be literally hours away. Pay close attention to this market, the lack of volatility over the last four/five days is a telling sign that a big move is imminent: up or down. Broad Markets Russell
2000 [ http://www.buythebottom.com/rut.html ] S&P
500 [ http://www.buythebottom.com/spx.html
] NASDAQ
100 [ http://www.buythebottom.com/ndx.html
] Dow
Jones [ http://www.buythebottom.com/indu.html
] From a commercial perspective, the Russell 2000 and NASDAQ 100 look descent while the S&P500 is deteriorating and the Dow Jones remains largely unchanged in negative territory for the last little while. It looks like the markets will continue higher for now, until we see significant selling in the NDX and RUT. Also of important note, commercials are recent buyers of the VIX (volatility index). In other words watch out for additional volatility to enter the market which typically translates into lower prices for stocks. In other words, watch the VIX, if commercials maintain their elevated net-long position, be wary of market declines. If on the other hand commercials sell volatility, I would anticipate less volatility in the near-future which typically translates into higher prices for stocks. I will advise everybody on the mailing list about the VIX position when the COT data is released. Commodities Gold
[ http://www.buythebottom.com/gold.html
] Currencies US
Dollar [ http://www.buythebottom.com/usd.html
]
©
2006 James West Updated weekly COT charts can be found @ www.buythebottom.com Mailing
list James West www.buythebottom.com Toronto, Ontario, Canada Email: westjam @ gmail.com (Remove the space before and after @ when sending your email.) The opinions of FSU contributors do not necessarily reflect those of Financial Sense |
