Tuesday - April 11, 2006
Oil Pushing 70
If this were a chart of the Nasdaq, pundits would be screaming double top. However, this is a chart of oil and stock market bears are unlikely to see a double top. I do not see a double top in oil (yet), nor do I see a downtrend in stocks (yet). Sure, rising oil prices hurt, but both stocks and oil are still trending higher. In fact, stocks have outperformed oil this year as the Nasdaq, Dow and Russell 2000 are already above their January highs.
By Arthur B. Hill - Tue 11-Apr-06 at 06:22AM in Oil
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Friday - April 07, 2006
Oil Follows Gold Lead
Gold is not the only perplexing issue. Oil also remains strong and the break above 65 is holding. The long-term trend is clearly up and oil held support around 60 in February and March. The next resistance zone is just below 70 and then it is on to 80. Ouch. One reason oil is strong is because demand is strong. Demand is strong because the economy is strong. From strength in the Dow Transports, it is clear that truckers and airlines are burning lots of oil to move lots of goods.
By Arthur B. Hill - Fri 07-Apr-06 at 06:40AM in Oil
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Tuesday - March 28, 2006
Oil Forms Rising Flag/Wedge
Let’s play a little what if. What could spur a rally on Wall Street? First, a sharp drop in oil prices could prompt the bulls. WTIC remains in an uptrend, but formed a rising flag or wedge over the last few weeks. These are POTENTIALLY bearish patterns that need to be confirmed. A move below the lower trendline and prior low (61) would confirm this pattern and project further weakness towards 55. As long as support holds, the bulls rule and this flag/wedge is only potential. XLE is challenging resistance at 55.
By Arthur B. Hill - Tue 28-Mar-06 at 05:09AM in Oil
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Friday - March 24, 2006
Oil Holds Support
Oil rose sharply yesterday. The move is enough to solidify support around 60 and keep the long-term uptrend alive. The advance since February looks like a rising flag (consolidation), but it is still rising with higher highs and higher lows. It would take a move below 59 to break flag support and signal a continuation of the Jan-Feb decline. Barring a support break and trend reversal, higher prices are expected with resistance at 70.
By Arthur B. Hill - Fri 24-Mar-06 at 06:44AM in Oil
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Wednesday - September 21, 2005
Before the Oil Runs Out
The Christian Science Monitor (click here) is running a three part series entitled “Before the Oil Runs Out”. It is a seriously long-term outlook, but worth a big cup of Joe and a read.
By Arthur B. Hill - Wed 21-Sep-05 at 12:18PM in Oil
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Thursday - September 01, 2005
Gas Humor
This one made me laugh…..
….until I filled up the tank.
LOL = Laughing Out Loud, OMG = Oh My God, WTF = What The &%$#
By Arthur B. Hill - Thu 01-Sep-05 at 06:12AM in Oil
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Monday - August 15, 2005
Economy Fuels Oil
David Pauly of Bloomberg (click here) believes that pricey oil is not hurting an expanding economy. This chart is a classic case and point. Both the NYSE Composite and West Texas Intermediate Crude have risen steadily since October 2002. While both may look overextended and ripe for a pullback, the big trends are clearly up.
By Arthur B. Hill - Mon 15-Aug-05 at 08:05AM in Oil
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Monday - April 04, 2005
Limited Oil
Barron’s interviewed Art Smith over the weekend. Smith notes that ExxonMobil (XOM) is not spending money to build reserves and does not think high oil prices are here to stay. On the other hand, ChevronTexaco (CVX) thinks reserves have peaked and there is no new supply coming into the market. He thinks XOM is not a great value, but TOT represents value and has a 3.3% dividend. The search for supply will increase and oil service stocks stand to benefit as capacity utilization rates reach 100%.
My view: Oil has been above $40 since July (eight months). It really doesn’t matter if oil is $55 or $45, both are relatively high and imply some sort of supply/demand imbalance. The chart shows a clear rising price channel that extends back to September 2003. I really don’t see oil falling below $44 and believe that demand is outstripping supply as long as this rising price channel holds.
By Arthur B. Hill - Mon 04-Apr-05 at 02:50PM in Oil
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