Chart Talk {05.08.17}

Below are two charts of crude oil, both showing the beating it's taken over the past couple of years.  The both charts are of West Texas Intermediate oil. The first one looks at oil on a weekly basis going back a few years and the 2nd is the daily chart since November.   I'm not going into the fundamentals on crude oil today.  I just want to show what the money's been doing so I've kept these charts real simple because they tell the story best.  Oil's been caught in a down draft. It's been in a huge bear market longer term.  It's well below its 200 week moving average and from a money flow standpoint it seems all the dollars have been rushing away from this commodity for a long period of time.  

Below on the daily chart you can see we had a bit of a bump after the election.  Crude touched that downward sloping trendline in red on the chart back in April then promptly collapsed.  Now it's bumping along towards an area it's found some support in the past, somewhere between 42-44.  Sentiment in the sector is terrible right now and it is very oversold by our work.  We'll need to watch this in the coming weeks for clues to see if we're close to a bottom in oil or whether this decline has more legs and could potentially test it's old lows in the mid-20s from 2016.

*Long ETFs related to energy  in both client and personal accounts although positions can change at any time without notice here or via any other form of media, including but not limited to print or electronic.

You can double-click on the charts to make them larger. Charts are from Tradingview.com