85 replies to this topic

[SilentOne]

Time to start a new thread. The last crude oil thread was initiated late May 2008 as oil was approaching it's bubble top. There is currently talk of "dumb money" buying crude and ETFs like USO. When I see articles/commentaries like this, I start to get comfortable with the bullish view. The dumb money as such were the buyers of crude and energy last summer as every single hedge fund/mutual fund was buying crude hand over fist (egged on by GS and their call for $150 oil). We are now setting up for a decent long trade in crude IMO. We broke the trendline down from last summer's highs last week. We also got short term Hurst FLD buy signals on USO and other crude products. This is an indication that the larger cycles for crude are bottoming. I will wait until either Friday this week or a sign that the stock market has hit its lows before adding to USO and USL positions. cheers, john

[GOOSE]

John do you ever look at the NatGas cycle? If so when do you think they will turn up? I finally got the Hurst Course last week and I'm going to dig into it starting today. Looks like it will take awhile to get through all the binders.

[SilentOne]

hi goose, It has been a while since I looked at natgas. There is a fundamental issue with shale production that has left me disinterested in this commodity. BTW, I've been stopped out of USL this morning which I had added last week. cheers, john

[inamosa]

Also stopped out of USL this morning with very small profit John, what are your thoughts on the near term for oil?

[SilentOne]

alysomji, I have to wait until the next 14 day low count comes in. That is not likely before Friday this week. cheers, john

[GOOSE]

HI John, I've been working my way through the Hurst course. I had to get my kids to help me with some of the math. At least I was able to figure it out after their laughter. I have one question, When he talks about the 5, 10, 20 day cycles do you count only trading days? When he talks of the longer cycles 5, 10, 20 week and longer those ones you would count weekends? I'm sure it will probably be explained further along in the course its just been bugging me.

[SilentOne]

hi goose, Hurst uses trading days. Note that the $SPX for example will have different cycle periods than say gold or crude oil. That is my opinion anyway. cheers, john

[LeroyB3]

Silent, I actually thought Hurst used calendar days in his charts. That's the way they appear anyway with the gaps between bars that I thought he counted. I use trading days too so it's not a huge deal, but just wanted to check. Best, LB

[inamosa]

Hey John & Co.

Went long on USL again on Thursday afternoon. Seeing momentum unlike I've seen in a long time in oil - since its bull run, actually. (Attached chart is of USO not USL)



With the oil to gold ratio being at decade lows, and the seasonals behind it, now is the time for oil.

Low risk opportunity, high reward potentially, IMO.

[SilentOne]

Crude Oil is correcting into a 7 and 14 day low. At least that is what I have for USO although other crude contracts seem to differ. I would want to see some confirmation that such a low is likely here. The gap on USO left on 4/03 should hold as I believe it is a breakaway gap. There was also a gap down on 17/02 which I surmised was an exhaustion gap and for now that appears to be the case. USO met its first 14 day FLD target near 30. This is a bullish sign. The 28 day FLD has also generated a target 31 - 32 and if crude is bullish, this target should be met or exceeded. A follow through rally would also possibly generate a 56 week FLD target. Let's first see if crude can find a bullish trend here. Note the 112 day (22/23 week cycle) FLD sits directly on top of the 28 day FLD. So for the moment the FLDs appear to be in cascade position. But the 112 day FLD will begin to rise in a couple of days and will likely not generate an upside target until at least 2 weeks from now. Make no mistake. If crude rallies today/tomorrow, bullish targets will be generated and will confirmthe larger cycles have bottomed for a good rally. We're long from yesterday's lows and adding today. This is a swing trade. cheers, john

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Edited by SilentOne, 12 March 2009 - 11:34 AM.