Wednesday, April 20, 2016

I was asked to provide a candlestick comment on WTI.

 What I see is a strong bullish session today reaching to new 5 month high.  The contract bested the April 13th high which was modest ‘shooting star’ and helped to form a ‘bearish harami’.  The decline following that reverse was short lived and ended well above the ‘bullish inverted hammer of April 5th. 

Looking back to the mid-Feb started advance, we remain particularly attracted to its steady advance that collected 11 new highs before it first succumbed to a decent pause.  The ‘hanging man’ top on March 22 interrupted one of the most productive month long advances since early 2015. 

The settlement and long bullish candle is constructive.  It follows two earlier bullish sessions which also suggest further gains.  The inability of pull-backs to dent recent mid-Feb started bullish run is impressive.  Finally, if you can look back to August of last year, either on the chart or looking to my blog (Let’s Talk Oil) and the subsequent impressive ‘three white soldiers’, the nesting of a bullish turn has been built long enough ago to hatch some buying. 

I have noted for months, the importance oil has in driving other asset prices.  Oils sway has not been diminished and the recent gains still suggest financial ‘repair’ more than economic repair.  Currently, financial stability, brought on in part by steadily higher oil prices help create a very strong base from which corporate concerns may have an easier time in advancing growth plans.  A latent consumer spending period may too be a lagged effect from growing financial stability as it leads to an even stronger jobs market, strengthening housing prices and household balance sheet gains from rising equity prices.  


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