if oil cracks here its going lower. oil looks toppy and the worst of the cold weather is almost over.
I don't trade the energy sector very often but here's a thought... January was the 3rd warmest on record in NY city and the whole winter has been extremely mild for the entire Northeast. If we get a "normal" February in the Northeast (freezing), the shorts might be scrambling.
its amazing. i live in south dakota where it is normally cold this time of year. it should be in the teens now. this year we have no snow and i have green grass in the middle of winter. it is the warmest winter on record here. it was 49 degrees today again.
Both good points...I do like that nice acceptance of the retest at 55. Looking for a possible blow out retest of the swing high near 58. Excellent volume these last 2 days. I agree, this has been an exceptionally mild winter. I think that thought proccess has been played out. Everyones waiting for the other shoe to drop. Also importantly XLE is trading as a whole at a way lower multiple than the current S&P, something going on there. Another thing to note , that with the share price currently so close to the current nav, this is telling us its a darling of the FOFs. If XLE is truly the oil decline hedge for the energy desks, then any further buying conviction in the underlying basket should take the lid off.
On the weather aspect, I live in Alberta, Canada, and we tend to have some pretty crappy winters (-20 Celcius or lower is not uncommon at all). We have had an unusually warm winter, with temperatures hovering a little under 0 celcius for most of the winter. We are now in February, and if things hold out just a little bit longer, we will have essentially had the first non-winter that I can remember (I have lived here all my life).
From a devil's advocate point of view, given the warm weather and the building stockpiles, why hasn't the price dropped even more? Wouldn't these factors be discounted in the price already? How long will it take the U.S. to burn through these extra barrels if there was another supply disruption? Is there truly an 'Iran' premium built into the price or is it simply a talking heads' phrase of the week. From my view point, there seems to be some real strength behind the price.
Moderately bearish.(Though we'll see a bounce on Friday) Too much hype about oil. You can see oil move up 50 cents now and everyone's screaming. A month ago, oil could go up a dollar or two successively and it wouldn't even appear on the headlines. It is, at least, time to sell.
Although I live in Russia, not in the USA and our weather this winter is far from mild (-12 C today and this is warm in comparison with January ), trading-wise I wouldn't put too much emphasis on weather alone. First, oil (commodity and stocks) is in the long-term uptrend and hence surprises should be expected in the trend direction not in the opposite one. Second, February is usually seasonal low for oil and natgas futures. Third, all this Iran uncertainty should help oil bulls. I'm not saying we have already seen the low but imho we'll see it during February. For now, it looks like a correction that should provide buying opportunity. Where exactly? Unfortunatelly I don't know but expect charts will show the entry point...
From a technical point of view I'd be looking to go short after another bounce that can't make it much past 57. Would be a textbook H&S with a short term target of around 51.