April 7, 2022

Technical Analysis of Crude Oil and Russell 2000 Index

Small-caps gauged by the Russell 2000 index or ticerk IWM made a failed bull signal on the breakout attempt in late March. I circled the day it started then failed to hold. A failed signal can be a powerful chart pattern. I expect us to test the lows soon and most likely blow through support much lower. Likely the S&P 500, Nasdaq, Dow Jones will follow. The next chart is the important price of oil. This is USO the ETF for crude oil futures. It is trying to find support on this trend-line I drew. It is currently a triangular bullish consolidation chart. The next couple days will be very telling on the next direction of oil. If it goes down the next couple days the run on oil could be over. Mortgage rates just rose at a historic pace and I expect the housing market to slow down. I think it's likely the economy slows significantly.

Oil chart





Russell Small-caps (IWM)

March 3, 2022

Bitcoin Double Top Forming

Here is some brief technical analysis on Bitcoin and the ETF GBTC. It couldn't reach a new high last winter and looks to be a clear double top formation starting. I drew another red line where there is some support. If this support gets taken out and price keeps dropping that is confirmatin of a top and we won't see new highs for some time. The chart is telling us there is likely more downside to come. If one is asking "is it a good time to buy Bitcoin?" the chart is telling us to wait.

February 14, 2022

Oil and Energy Continue to Perform

Crude oil continues to breakout and show high relative strength. It is a momentum breakout even as the overall stock market falls and continues to put up big red days. I see it as a high inflation play but regardless it is unstoppable at the moment. I'm fairly overweight energy in my long-term account and have been trading USO calls. I like PBR Petrobras here with it's high increasing dividend payouts. It has increased the dividend greatly the last three quarters and it looks like big payouts are in the future. The floor for dividend payouts is $4 bil according to the company for this year and they see this increased payout contnuing for a few years. They have reduced long-term debt considerably. They are looking for 60%-80% of free cash flow to be payed out in divdends. I noticed the stock chart while screening breakouts and then I saw the high dividend. The yield with the stock at $14 a share is roughly a 14% div yield here if things go as planned. The worst case dividend yield scenario is a 4.4% yield. I'm bullish on oil and see this as a good pick up here. It is coming off a bull-flag today.