The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday.
Crude oil and natural gas have stolen the commodity show of late, with crude’s multi-year breakout seen on the weekly chart, above the light blue resistance trendline dating back to 2012.
The most wildly bullish way in which the breakout develops from here would be to see last week’s gap higher not get completely filled. $38.71 marked the lows from last Thursday for theUSO ETF. And the daily timeframe shows that holding that gap would give bulls a bullish “breakaway gap” higher which implies much higher prices to come and, in effect, the chase would be on.
Another alternative would be to see a “partial” gap-fill, with price breaking Thursday’s lows but finding strong support above Wednesday’s highs. This, too, would bode well for crude bulls going forward.
Also note that a complete gap-fill, in and of itself, would not be inherently bearish for crude. However, given who many false breakouts we have seen from crude in recent years, the bulls have an excellent opportunity for a breakaway gap and, essentially, the “real deal.”
Natural gas, despite a sharp shakeout early last week, finished strongly and is still on watch for a major weekly chart breakout into the $30’s, using the UNG ETF. At this point, a move over $27 likely ushers in another surge in upside momentum.
After a riveting rally in the winter, the soft commodities have been correcting or consolidating for most of the spring months.
With coffee now trying to find support, I am on watch for all of the soft commodity ETN’s, especially CORN JO SGG WEAT to stage upside reversals into July, especially given how steep the downtrends are for corn, sugar, and wheat, while coffee attempts to stabilize.
A protective stop-loss below recent lows for any longs is suggested in case a deeper pullback ensues.
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