|
The U.S. Oil Fund (AMEX: USO) bounced back on 7-11, proving that the biggest influence on prices at the current time is the geopolitical situation.
Prices jumped significantly in overnight trading, bringing crude prices from below $140 quite convincingly.
Chart Courtesy of StockCharts.com
This has been an interesting week for oil, as news that T. Boone Pickens has gone big on wind power, which we actually revealed on May 16, 2008  (Click here to read article.) finally hit the mainstream radar screen, as well as news that Iran and the U.S. were in secret negotiations moved prices lower.
Perhaps just as important was the fact that the Energy Information Agency (EIA) reported that gasoline demand is falling. Or maybe, a hedge fund had to meet a margin call.
Who knows? The fact is that on Monday, and Tuesday, crude sold off over $9, breaking below $140, and taking USO below $110, a critical support level.
Yet, by Thursday, crude and USO had both swung back, and began to move higher, suggesting that at least for now, the "buy on the dips" mentality, the lifeblood of a bull market is still in effect.
To be sure, this could unravel, especially as the weekend is coming and no one really knows what will develop by Monday.
Our best advice at this point is to remain patient and see what develops next week, although aggressive traders should consider re-establishing long positions that may have been shaken out during the shakeout that occurred on Monday and Tuesday.
Visit our energy section for more details.
Make money whether the market rises or falls. Get Dr. Duarte's All NEW "Trading Futures For Dummies." The Trading Manual for All Seasons. Updated, revised includes new charts, and full chapter on ETF timing.
“Futures And Options For Dummies,” Dr. Duarte’s latest book is now available. The markets are responding to news and geopolitical developments like never before. In this environment, individual investors need to expand their investment horizons. "Futures And Options For Dummies " (John Wiley & Sons) has an excellent section on oil futures as well as the currency markets, while covering and expanding on the successful strategies in Doctor Duarte's other books. Order your copy today.
Doctor Joe Duarte's Market I.Q., offers subscribers a unique blend of intelligence, market commentary and trading strategy. Duarte's daily articles, and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Doctor Duarte is a writer, and an emerging futurist, with a diverse background, and a growing audience. His combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.
He is the author of four books: "Futures And Options For Dummies," "Successful Energy Sector Investing," "Successful Biotech Investing" and co-author of "After-Hours Trading Made Easy."
In early 2001 Dr. Duarte in "Successful Energy Sector Investing," correctly predicted that Venezuela's political problems could lead to an energy crisis in the United States.
In 2003, also Dr. Duarte was among the first to widely publicize the long-term friendship between French President Jacques Chirac and Saddam Hussein.
He has also appeared as a weekly guest on Market Mavens Radio, has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.
One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990.
His articles and commentary have been featured on CBS Marketwatch, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines.
In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.
|
