Something to keep in mind regarding oil stocks. Yes, I'm bullish. But charts can always break down. A great setup doesn't always mean great follow through. Despite the confluence and nearly perfect setups I'm seeing across the board, you still need to prepare for what happens if it doesn't pan out.

Why do I say this? Well.. on my daily crude chart I run my typical +4ATR and -4ATR Keltner bands along with RSI and MACD. Each one gives a different insight into overbought and oversold conditions. None of them individually can tell you the long-term trend. None of them individually are to be relied upon as guaranteed leading indicators. But each of them can give clues, and if converging in the same manner, can tell you that something is about to happen.

As of April 4th, I have the first RSI sell signal on my Crude futures chart with MACD either running flat or potentially rolling over. The last one was September 19. RSI had already rolled over from being at 80. Crude got a slightly higher high and then sold off on September 28 from $95 to $67 on December 13th. The day it started to sell, MACD had already topped, rolled over a little, and even come back to the top and started to roll down again. Crude was running around +5 ATR, a good chunk above the top Keltner band. By the time we got the daily 8/21 EMA crossover, Crude was already down to $82.

Before that, the last sell signal I had on RSI was 3/9/22, a couple days after the peak in MACD. RSI had peaked a couple days prior at 84. Crude then sold off from $130 to $92 by 4/11/22. As we know, it got a good bounce but never saw new highs and sold all the way in choppy fashion until 5/4/23 and $63. This one was different though, as it was the 3rd sell signal between the bottom on 12/2/21 at $62, and that 3/7/22 $130 top. The first two sell signals came on 2/8/22 at $91 and only dropped to $88. The second came days later on 2/15/22 at $95 and only sold to $87. So in a bull market, the RSI sell signal marked a small retracement on the way up 2 out of 3 times, and the top 1 out of 3.

Is this relevant? I think so. Because the sell signals lead to at least a local top. Does it mean Crude is going to tank? Maybe.. maybe not. But it's something to pay attention to, because IT HAS marked long term tops every time in this cycle off the COVID low.

So if you are playing any of the name I posted about, please watch the support levels I mentioned along with the stop level. You have to decide what amount of risk you are willing to take. I can't hand hold. But you have been warned. I've laid out the bullish potential but I've warned of the risks. It's up to you to do what you think is best. I think this oil market can run into 2025. But if you asked me today, I'd say we get a retracement very soon. I think another retracement that seems to converge on multiple charts is going to be between August and December. But again, I'm not from the future and I'm not a fortune teller. I use my tools to lay out the most probabilistic path that makes sense to me, knowing the risk levels along the way.

Got the top of QQQM today! ($182)






For my buy...

If BTC drops from here and can't make a new high, I've got a target range for next entry between 48k and 60k. If it does make a new high, 75k is massive resistance right now.

SLV - Draw a trendline (in log mode preferably) from the March 2022 high to the 2023 high, and make sure it carries forward. Historically, when silver breaks out of its wedge, it comes back to the top of the wedge before moon blasting. That would put SLV around the $23 range. If you don't have an entry yet, that could be a great place if history repeats. Would also be a good place to layer into more long dated calls.

If you are in the September $26 calls, I wouldn't fault you for taking some profit up here. Metals can tend to run though and can get extensions you aren't used to seeing. So I'm not saying to sell. But those are up pretty nice right now. If you do sell, be looking for that chance to layer back in. Maybe even kick it out to Nov or Dec.

https://www.cnbc.com/2024/04/09/hedge-funds-are-selling-stocks-at-the-fastest-pace-in-three-months.html

Quote:

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Hedge funds are dumping stocks at the fastest pace in three months as what's often called "the smart money" stepped up bearish wagers against equities amid the recent pullback.

The professionals sold global stocks on a net basis for a second straight week last week, driven almost entirely by short sales, according to Goldman Sachs' prime brokerage data. It marked the biggest selling week for hedge funds since mid-January, the data showed.

Separately, Bank of America's client data showed a similar trend. Its hedge fund clients sold stocks for a fifth consecutive week last week, exiting shares across small-, mid- and large-cap companies.

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Quote:

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"Valuations are so stretched right now that anything less than perfection from economic data or any geopolitical noise can create substantial and quick selloffs." said David Bahnsen, chief investment officer at Bahnsen Group.

Consumer discretionary stocks were among the worst performing and the most sold U.S. sectors on a net basis last week, Goldman said. The Wall Street investment bank noted that hedge fund managers reduced long positions in the sector every day and shorted retail-focused exchange-traded funds.

The SPDR S&P Retail ETF
(XRT) dropped 5.5% on the week.

One of the biggest drivers of the recent pullback has been a shift in interest rate expectations. The market has again dialed back its outlook for rate cuts this year, seeing a coin flip between two and three reductions, according to the CME Group's FedWatch gauge of trading in the fed funds futures market. Traders started the year pricing in as many as seven rate cuts for 2024.

"We think June is no longer a given for the Fed to start cutting rates but see rate cuts coming as inflation falls," Jean Boivin, head of the BlackRock Investment Institute, said in a note Monday.

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Just something that everyone should keep at the back of their mind.