Momentum Monday – Is Oil The Only Chart That Matters?

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Good morning…

Before I get started…please remember to fill up your gas tank. Yes oil at the pump is expensive right now, but from the charts it looks like it is about to get even more expensive.

The only cool chart during the pandemic panic of 2020 was oil trading negative.

I should have been calling my broker and buying it, but I did not.

Today, oil is breaking an EIGHT year downtrend and technicians are calling for $100. The Rotation Report is right…’right or wrong, oil is our inflation proxy‘.

Inflation or deflation, pandemic or no pandemic, Momentum Monday keeps coming at you (as long as Zoom and YouTube are working). This week Ivanhoff and I discuss the markets as we look for signs of life outside of energy, commodities, and financials.

Here is the link to the show and I have embedded it below here on the blog:

Here are Ivanhoff’s quick thoughts:

Interest rates continue to rise which is putting downside pressure on most momentum stocks. There are always exclusions like AFRM which staged a major short squeeze last week. The norm for most momentum names lately has been downside to choppy. Inflation expectations are rising- not so much because of pent-up demand and rising wages or skyrocketing money supply but mostly because of supply chain disruptions and shortages which might take many months to resolve. As long as this remains the case, most high-multiples stocks are in danger – think tech and biotech.

In the meantime, financials and oil stocks are owning the 52-week highs list. Less than 18 months ago WTI Crude oil went into negative territory because there was too much of it in storage. Right now, it is pushing $80 per barrel and the energy space is having a massive comeback – not just oil & gas but also coal and uranium.

The so-called recovery stocks (travel, leisure, entertainment) had a brief moment under the sun in late September. They gave back most of their gains in the past week.

Chinese stocks finally woke up. I don’t know if this is just another dead-cat bounce. What I know is that sentiment towards them has never been so negative. Low expectations plus a good technical setup typically equal potential for significant profits. Speaking strictly from a short-term swing point of view. Long-term, they are still in a downtrend. Personally, I would not hold them overnight.


Here is Charlie’s 7 chart Sunday.

Nikita has an update on the SPAC markets.

The weekly Stocktwits 25 is always free and a great place to start your wee of momentum and trend hunting.

Finally today…remember earnings are back this week.

Have a great week.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here