By: Scott Redler
I only focus on oil a few times a year. Once was when it was going parabolic and on CNBC I said don’t buy it and get ready to be short (it was around $140 then). It went to $147 and then dropped a quick $30. Then, this December with Mark Haines and Erin, I said to get long for a micro move at around $38-39.
That was then, this is now:
Oil is back on my radar for a momentum move in the coming weeks. The range is getting tight and there are lots of overseas catalysts and fundamental reasons developing. The bottom line is: technically it looks GREAT for a momentum move.
ALL TIME FRAMES ARE LINING UP. Here is the daily chart:
and the weekly:
$40.40 is my line in the sand. A daily close above and I will be actively trading it again. A trade above $84ish in oil and a close there should ignite another move to the $93-98 area.
THIS WILL NOT BE GOOD FOR THE STOCK MARKET and could lead to a May-June sell-off in the market. By that time the Dow could be in the 11,100-11,400 range and the S&P in the 1,200-1,225 area. I will look for the same setup that I saw transpire in January.
