Everybody and his brother are short oil, or earl as they say in Texas. Years ago, Pure Prairie League changed a tire for Merle Haggard to make sure his country-pickin' fingers did not get covered with oil, er earl. I'll Fix Your Flat Tire Merle. The Uber driver said he just went triple-leveraged short oil. The television and internet pundits guarantee that oil has nowhere to go but further down.
King Donnie is holding on to the lower oil prices loin cloth with both of his small hands. Trumpski promised to deliver lower prices on day one and here we are a year later with everything higher except oil that also filters into lower gasoline prices. Food, insurance, electricity and other costs are through the roof so folks are not paying much attention to the gasoline savings. The 300 million have-not's in America are telling the 30 million have's that they cannot afford to live anymore. The high prices are killing them and burying many in even more debt.
Things are about to get very interesting because oil prices are about to rally off the possie d. That tiny loin cloth, it does not have to be that big to cover everything, will be pulled away as oil prices rise exposing an orange sight no one wants to see. The blue falling wedge pattern is bullish. Stochastics are oversold agreeable to a bounce.
The green lines show how price makes lower lows but the chart indicators are now universally sloping higher, positive divergence, so oil is on the launch pad and all fueled-up ready to begin a multi-week rally higher. That will get everyone's attention since everyone is short. Even Father McClean took the money that was allotted for needy children and bot triple-leveraged oil shorts figuring he will be able to buy 3 times as much stuff for the kids (not thinking that he may lose it all and end up with buptkis).
Price is poking at the lower standard deviation band so a move higher to the middle band, that is also the 20-wk MA, at 61, is on the table, and the top band at 66, both dropping sharply. Oil would be expected to bounce anytime and begin a multi-week rally higher. The candlestick so far this week has that long tail. It tells you so far this week it is a bull/bear battle but the oil bulls are winning out so the fuse must be lit and the countdown has started for the rocket launch.
The Aroon red line shows that all the oil bears remain 100% bearish that would be somewhat expected. They are talking their own book. But comically, the green line shows that 100% of the oil bulls also believe that oil will go down in price forever. Talk about a loaded oil tanker to one side. There are zero people on the oil bull side with 100% of everyone on the bear side expecting far more downside ahead with oil prices. You know what is going to happen.
Keystone is not playing oil long or short these days and will likely not play this set up. Lots of derivatives, such as those with commodities, are not behaving themselves as this goofball 3-month major stock market topping formation plays out. Obviously, the play with oil would be on the long side going forward. Once the shorts begin panicking as oil price floats higher, that rocket fuel (short-covering rally) will likely create a big move higher off the bottom and cause King Donnie to lose his 'low oil prices loin cloth'.
The West Texas Intermediate Crude Oil daily chart is the same set-up. Price comes down for a lower low with all the chart indicators possie d and the Aroon verifying the over the top group-think that oil will keep dropping in price. Oil is going to start moving higher, folks, and perhaps a big jump higher as the shorts panic and cover. Plan accordingly. Now would be a good time, if you are running a business heavily dependent on fuel, to think about hedging for higher fuel costs. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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