On June
23, 2011, I stated that my crude oil model would likely give a sell signal
at the end of the month. Then again, who knew that the stock and
crude oil markets would take off for more than a 5% gain last week? Well
that mighty burst has West Texas Intermediate (WTI) crude oil (cash data)
back above its 10 month simple moving average and that means the bull signal
is still on!!! Hold the phone...there is no sell signal.
I first discussed crude oil's potential for a very strong move back
on January
19, 2011. I based this analysis on a strategy that I discussed
in the article; please review for specifics. That turned out to be a
good call although honestly we have ridden this baby like a roller coaster -- up
and down with lots of steep drops and strong turning twisting moves! It
has been a wild ride.
Figure 1 is a monthly chart of WTI crude oil, and we note that price
closed the month above the simple 10 month moving. See the price bar
inside the gray oval. In addition, WTI remains in a nice uptrend, albeit
at the lower portion of the trend channel. I like to buy low, so this
kind of action would appeal to me.
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