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does DUG look to anyone else like it's forming a bottom here ? I've also noteiced a fe tops in the Oil and Gass sector.. Howver some of the independant oil and gass companies are zooming still. What is that? speculation over finding new drilling sites?
HOC is an example of a beaten donw Oil and Gass.
so if DUG is a bottom then what migh tha mean for the dollar and the economy ? ? etc etc.
OR i'm missing some bearish pattern.. if this is the case please enlilghten me.
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dug is tempting, but the problem i see with dug, is the xle and crude are trading are still in bull markets. until the bull is over the failure rate of going long dug is increased and upside limited.
chances are commodities are just undergoing a consolidation.
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Scott, no matter how you veiw the markets, the one constant is that where there is extream volume then there is smart money involvment. This is going to be my first ETF that I invest in. That Volume is building into a monster move. Funnymony I am sorry but you are wrong if you look at Hemscot MG121 & MG122 Oil and gas then you will see that they are declining since early March Sir Gapscan said that the Bull market will not end until Oil enters the party well they are here now. This ultra-short ETF looks like my chance to short the market (if I trade an ultra-short long is that realy shorting)???
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oil has pulled back to $100 and the partys over? lol.
i guess when i look at a trend i go farther back than few weeks. i generally go back 4 years, draw some trendlines, and see where the 40dma is relative to the 200dma. crude oil is clearly in an uptrend. oil stocks are in an uptrend, although consolidating, not far from a major area of support. i'd like to see a 40x200 crossover and major support taken out before assigning a trend change.
lower oil prices can also help oil stocks. when oil prices are to high it can kill demand. and i doubt the oil countries will let oil fall very far.
all that green bop on dug is very pleasing to the eye, but if you back to when dug was $70, you'll notice bop was green all the way down to current levels. and volume building
so if i'm trading dug i'm only trading short term maybe off a 60 min, trying for a few bucks. not my style, i think i'll pass.
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and if i wanna play commodities i'd rather go short or long the actual commodity, and eliminate a set of variables, ie, company news, valuations, earnings, etc.
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Funnymony I am sorry that I used the term that you are wrong. I want to keep this in the spirit in wich I intend it - a friendly debate.
In the next two charts I will demonstrate what I mean about smart money. Now you will notice that in the Hemscott Oil & Gas we see a top on the weekly in October of 2007. Stochastics confirms as the price action is makeing lower and lower highs. So really this industry over-all has been in a correction since October of last year. Now I find it Ironic that when we veiw the ultra-short ETF of the same industry also on the weekly that Volume just explodes, also in October of 2007, a coincidence? I do not think so.
Just my opinion. I would like to have others chime in on this. Scott thanks for starting the thread and giving my first chance to play an ultr-short ETF
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QUOTE (funnymony) and if i wanna play commodities i'd rather go short or long the actual commodity, and eliminate a set of variables, ie, company news, valuations, earnings, etc.
Very true ... like all companies ... these companies make their money on the "margin" ...
So ... if they have high raw material costs ... and low finished goods prices ... the price of oil can be going through the roof ... and you can be losing your butt in DIG ... (or inversely in DUG) ...
If the commodity is what you believe that you have a handle on ... yet you don't have a futures account ... or maybe the gonads for it ... USO is a much better ... and much more pure play ... on the commidity ...
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Interestingly DIG looks just like the indexes did a few months ago in terms of TSV and VOLUME. I'm gonna call it a top. AND if anyone is curious Technitrader called the sector toping some time agao.. (they were very early on the Residential bust also.)
so .. I tlooks like this is a golden oportunity.. now not to blow it scott.
So DIG is looking like a pretty clear top and DUG is looking like a pretty clear bottom. Technitrader is or was lecturing about the inelastic market and the artificial price levels of oil based on trader speculation.. while MOST of oil and gass is on the decline.. I'm gonna go out on a limb here but I think this year we'll see a significant drop in oil prices.
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mg121 does look toppy, yet it is still a consolidation in an uptrend. you can see on mg121 is resting on some major support. keep in mind dug is the inverse of xle(a combination of sectors in the oil patch). support is actually little farther away on xle than mg121. i'd like to see that support level , were close to, get taken out, before i'd bearish. then probably look to short the rallys.
so i guess i'm saying i don't completely diagree about the tecchnicals, just that the uptrend hasn't quite been broken, and were to close to support to make a trade with good r:r right now. we've heard this "the bull in commodities is over" before. not to mention we have a fed and congress that are dropping money out of helicopters. i won't be surprised if oil and gold are just consolidating, and offering another opportunity to go long.
cheers
QUOTE (Apsll) Funnymony I am sorry that I used the term that you are wrong. I want to keep this in the spirit in wich I intend it - a friendly debate.
In the next two charts I will demonstrate what I mean about smart money. Now you will notice that in the Hemscott Oil & Gas we see a top on the weekly in October of 2007. Stochastics confirms as the price action is makeing lower and lower highs. So really this industry over-all has been in a correction since October of last year. Now I find it Ironic that when we veiw the ultra-short ETF of the same industry also on the weekly that Volume just explodes, also in October of 2007, a coincidence? I do not think so.
Just my opinion. I would like to have others chime in on this. Scott thanks for starting the thread and giving my first chance to play an ultr-short ETF
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QUOTE (funnymony) so i guess i'm saying i don't completely diagree about the tecchnicals, just that the uptrend hasn't quite been broken, and were to close to support to make a trade with good r:r right now. we've heard this "the bull in commodities is over" before. not to mention we have a fed and congress that are dropping money out of helicopters. i won't be surprised if oil and gold are just consolidating, and offering another opportunity to go long.
Exactly ...
Crude's prior consolidation was between $86-$98 ... now it seems if we may be setting up another between $98-$110 ...
Without a breakdown into the prior consolidation ... calling a top is probably premature ... as all we have really done so far is to test prior resistance as current support ...
The trendline on world spot gold is coming in around $900 right now .... without a violation of that trendline ... calling a top in that market may be premature as well ...
I'm not saying that they don't both ultimately violate those levels ...
Just that, in my mind, there is not sufficient cause to be overly bearish on them while they are at ... or very near ... support levels ...
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looking at the xle weekly, which seems to mirror dug(by 50%). it had the same kind of action in 2006, declining macd, moneystream, yet the longterm uptrend was never quite broken. it eventually firmed and rally to new highs. so until the trend is broken, its a bull.
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[/QUOTE]
Exactly ...
The trendline on world spot gold is coming in around $900 right now .... without a violation of that trendline ... calling a top in that market may be premature as well ...
I'm not saying that they don't both ultimately violate those levels ...
Just that, in my mind, there is not sufficient cause to be overly bearish on them while they are at ... or very near ... support levels ...
[/QUOTE]
gold's 200 dma is way down at $800. gold could sell off to that level without the long term trend being broken, like it did in 2006. a 50-62% retracement, of the move since september wouldn't be that unusual.
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Yes, I think DUG should rally while XOIL is testing it's Febuary lows. DUG may only rally to a little over 50 for now before the oil & gas stocks join the rest of the market if it is still rallying. If you want to look at something to be long on dips, ITB, USD & SAA look good after todays action. UYG & QLD look like they should be ok to buy on dips also. XPLT maybe the metal to watch & see if the commodities are going to top out this year.
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oil back above $105. as we can see, the bull doesn't die easily.
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heres one a little more to my liking, SKF.
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Did y'all see the article at cnbc today where Boone Pickens admitted that he was wrong in shorting the crude / nat gas market ... and now sees prices remaining above $100 for the rest of the year ?
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ya, cnbc brought him on hoping he would talk down the price of oil, and he did the exact opposite. lol.
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so which time was he right? To make a call like that for the rest of the year seems really difficult to me.
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I think T Boone Pickens first one may have been good, just about two weeks to early. If XOIL is going to test the Feb. lows it should hold around here for a few days to pull in as much weak money as possible & then start selling off again. If DUG opens down some at the opening I think you should buy some as I think XOIL will be turning back down & we should have a good chance of seeing XOIL under $90 in three weeks. What T Boone Pickens said about building wind mills to produce electricity & building infrastructure to use nat. gas instead of gasoline in car was important to the future of cutting gasoline usage in automobiles.
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QUOTE (Sir_Gapscan)
I think T Boone Pickens first one may have been good, just about two weeks to early.
Pickens' assessment isn't based on squiggly lines on a chart ... it's based on the fundamentals of the supply/demand ratio of the market ... that supply is capped in the 85-86 Mbpd area ... and demand continues to grow ...
So ... that being the case ... there must be something in that metric that you feel is going to iminently change ...
Is it the supply ... or the demand ? And why ?
QUOTE (Sir_Gapscan)
What T Boone Pickens said about building wind mills to produce electricity & building infrastructure to use nat. gas instead of gasoline in car was important to the future of cutting gasoline usage in automobiles.
Yes ... but ... that is change that may ... or may not ... come to pass over decades ...
And we're talking about the immediate future of the markets ...
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QUOTE (Sir_Gapscan)
I think T Boone Pickens first one may have been good, just about two weeks to early. If XOIL is going to test the Feb. lows it should hold around here for a few days to pull in as much weak money as possible & then start selling off again. If DUG opens down some at the opening I think you should buy some as I think XOIL will be turning back down & we should have a good chance of seeing XOIL under $90 in three weeks. What T Boone Pickens said about building wind mills to produce electricity & building infrastructure to use nat. gas instead of gasoline in car was important to the future of cutting gasoline usage in automobiles.
WOW that's a scary short for me here on XOIL as I look at it. Weve got support from november through feb. I'm no economist so I don't pretend to fully understand the other factors playing agains oil other than the things mentioned here. As I see it oil had a good pullback from a consolidation breakout. I dunno ... it's not for me to say how high oil can go. ALSO XOIL just generated a buy signal for a strategy i'm working one... however it's also near a stop and reverse aspect of that strategy.
I wish volume were not pegged out across the board so I could see what was going on . I still say dug is looking good on a longer time frame. Looks like a bottom .. and the increased volitility adds to my theory there. Actualy allot of breakouts fail... so XOIL could well pick up the pace on the down side. Time will tell.
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As I posted under FXI yesterday, I think NDX--X appears to be forming a five wave down move. If this is so; the forth wave could have ended two days ago & with it closing back below it's 50 day moving avg. today, the NDX--X could be about ready to selloff back down to it's March lows. If that happens we could get a small bounce before this final wave five selloff ends somewhere just under 1600 based on the length of the November selloff. If you do not think DUG will join the selloff, but you think I might be right about NDX--X, you can buy QID or REW to be short tech stocks. Or you can just short QLD, ROM or USD to be short the tech sector. If you do not like shorting , then I think you should just wait on the sidelines until this next selloff has time to finish. If we are about to get a fifth wave down in the Nasdaq stocks it will tell us two things, 1) the bear market rally to follow should retrace around 38% to 61% of this decline from the Oct. highs & 2) the bear market selloff to follow this rally should end below the bottom of the fifth wave selloff we appear to be starting now. Good luck & be careful investing in this bear market.
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Ok ... well ... you confused me just a bit ...
When you were talking about Pickens being early ... I assumed that you were talking about oil ... as in the commodity ... being primed for a selloff ...
But ... I guess what you're really talking about is oil sector stocks ... which could go lower in spite of the oil remaining at levels above $100 ?
I guess my thinking is simply that the action in the energy futures is more tied to protection against currency debasemnet ... moreso than the fundamentals of their individual markets ...
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Yea Im' feelin it too this time..
My short strategie scans are starting to fire off. on 2/1 08 I had 60 + in there and on 2/4 I had over 300 in the scan.
I've since added filters to trim down the numbers. for the most of last week there were less than 11. Today there are 67. I'm guessign that is similar to preadjusted levels of 200.
however DUG is flashign a buy signal to me.
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Realitycheck, I am expecting commodities to correct some more as the stocks continue to selloff. The correction in commodities should end about the same time as the stock market does, it would be better for stocks if it takes two or three weeks longer. But we will just have to see what the markets give us.
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QUOTE (Sir_Gapscan) ...it would be better for stocks if it takes two or three weeks longer. But we will just have to see what the markets give us.
Agreed ....
Although ... I'm not sure that I agree that the positive action in commodities and the positive action in stocks are necessarliy a coincidental relationship ...
It seems to me that at some point that realtionship must invert ...
As the inflation caused by skyrocketing commodities will cause margin pressures .... and reduced demand ... due to ordinarily disposable income having to be spent on necessities of life ...
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DUG- looks like a head & shoulders pattern forming, Moving averages are in reverse order of what a good long would look like. Just my 2cents
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QUOTE (Tmontemage22) DUG- looks like a head & shoulders pattern forming, Moving averages are in reverse order of what a good long would look like. Just my 2cents
In order for a Head & Shoulders ... to be a Head & Shoulders ... doesn't it have to suit a certain volume profile ?
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head and houlders are topping formations... you don't get a head and shoulders during a decline. Unless you mean an inverted head and shoulders then you have abotoming pattern.
the olume profile i'm less certain of. I think it's not a good idea to attach to many fixed concepts and absolutes to the market. I've seen bottom patteres form and followthrough on all sorts of volume. but you may be right. But judging by the recent rise in volume i'd say some sort of bottom is forming. At least I'm willing to loose a bit to find out and price now is in a range that it looks attractive to risk a bit to see if this will be a bottom or not.
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Well ...
Perhaps it's just me ... but in order for a chart patten to be valid ... it must "tell a story" ...
You see ... there is no real significance to squiggly lines on a graph ...
What we seek to find in these charts is a graphical representation of the underlying setiment/psychology acting on the security ...
In essence ... we seek to watch the "herd" in an effort to predict it's next movement ... and with any luck ... position ourselves to benefit from it ...
When it comes to chart patterns ... like the H&S top for instance ... they are carefully studied to calculate the failure rate when they have a slightly upward sloping neckline, a level neckline, a slightly downward sloping neckline, volume relationships involved in the making of each element, etc ...
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and what do you see going on in DUG right now?
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opened a stop entry order.
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QUOTE (scottnlena) head and houlders are topping formations... you don't get a head and shoulders during a decline. Unless you mean an inverted head and shoulders then you have abotoming pattern.
the olume profile i'm less certain of. I think it's not a good idea to attach to many fixed concepts and absolutes to the market. I've seen bottom patteres form and followthrough on all sorts of volume. but you may be right. But judging by the recent rise in volume i'd say some sort of bottom is forming. At least I'm willing to loose a bit to find out and price now is in a range that it looks attractive to risk a bit to see if this will be a bottom or not.
i've see head an shoulders patterns in a decline act as a continuation pattern.
i just see this as trading sideways in a wide range. at least your near the bottom of the range.
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either way the Risk to reward is good and i'm willing to risk the range of he last two days to find out if it will swing up to even 1/2 way to the top of the larger range... if not beyond.
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which way will it go. place your bets.
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QUOTE (funnymony) which way will it go. place your bets.
I prefer not to gamble or predict. I see current weakness. I also see a short term triangle which is usually but not alwayse a continuation pattern. Right now price is no where near my entry order.. if it reverses back up to the entry order then it may be signifficant but MS on DUG is colapsing as of yesterday so I may let the order sit for a few more days and then cancel it.
There was my order in plain view for the world to see and no body took out my order... and pushed prices down. I also waited 5 min after marekt open on the day I entered it. I"ve alwayse used buy stops and generaly never had a problem with them.
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QUOTE (funnymony) which way will it go. place your bets.
Well .... let's see ...
A guy who forgets more about the oil market before breakfast in the morning ... than I will ever know ... recently shorted oil ... and hand his butt handed to him on a stick ...
I might be long ... and I might be out ... but I won't be short ...
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Realitycheck
That dosen't mean his timing is right. traders can affect an issue outside the bounds of economic senseability. I got clobbered trying to short AIV and then it went down..
It was the right stock ... the wrong time. I'd be curious to know who is this oil expert that tried to short oil? That says something. I know that allot of pro traders accept that they may take a hit once or twice trying to get positioned for a move before it finalyunfolds.. it's the cost of doing business. Tradeables are rarely leash trained (except for bigblock)
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Scott, I keep looking at the weekly charts of DUG and MG121 and although for the very short term it looks like oil is winning. (IMO) the smart money is building their nest in DUG and that soon oil will need to be shorted.
Just my opinion.
Apsll.
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