Seasonally, WTI oil can be choppy into February. True to form, WTI has been trading sideways in a tight range since it broke out from a major point of technical resistance last November. Since that breakout, WTI crude seems to be trading in a range between $51 and $54.50. Daily momentum and moneyflow are trending down- as marked on the chart. This shouldn’t surprise anyone given the seasonal tendencies for chop mentioned above, and it shouldn’t discourage us from looking for a buying point in oil shortly. Ideally, one would buy oil and oil-related equities upon a breakout through $55, and a hook up on momentum. Or – one could leg in with part of their allocated capital if oil pulls back to around $51 – and then wait to allocate the other part of their capital upon a breakout. I’m open to either strategy in the coming weeks.
As an aside, I’m just heading back from a cycling trip in Florida, and I must say that there is a certain amount of positive vibration surrounding the Trump election down here. Whether that confidence in the economy is well founded or not will be proven or disproven over the coming year or two. In the short run, that confidence should be reflected in another factor to buoy US markets and the greenback, all other factors being equal.