Howdy,

I posted here a day or so ago my technical analysis for oil. Well I took a look at the oscillators for oil after Tues' action. My favorite and most reliable indicator, the DMI with ADX had not been tweaked and fine tuned. I did that and found that the ADX trendline did advance above the signal line, so we've got a valid bullish signal confirmed for measurement. It was actually confirmed back at $24.00 an ounce when the plus and minus lines crossed, but the ADX line now coming above helps us better estimate the move itself

That move is showing at least another $2.00 movement to be most likely and the actual measurement factors (usually a 70% chance of being right) shows a minimum to $32.00 overall in the bull run (tho' you may get pullbacks first) BUT as I said the other day, the signal here for measurement actually puts out a range of up to $12.00 to $16.00 from the baseline run at the $24.00 level. That means $36.00 ot $40.00

Now as I said, generally these DMI movement estimates have run historically a 70% track record for me when I traded the markets, primarily in the precious metals, but some in oil and that ags and currencies. (Note: it will absolutely--in fact DMI does NOT work for bonds at all--trust me on this one. Got my shorts burned too many times on bad bonds trading with DMI). Anyway, this is all FWIW, but just to underscore what Gordo and Downstreamer and others here have been saying in that the technicals support or are leading the big boys to buy bigtime with super confidence OR else they know something REALLY BIG is going on behind the scenes Cause the BIG BOYS just don't go LONG over a 3 day holiday weekend unless they're D***** sure some thing big is goin on.

My guess is that it's all related to diminished ability to produce. These latest refineries going down...and I saw in one wire story that Venzuela was trying to exceed quotas but can't even produce enough to meet its actual quota ceilings. Then we get the big explosion in the Biggie Venz refinery and I gotta think our big boys aren't fessin up to why ALL these sudden problems with refineries and pipelines.

ALSO, keep in mind, as I saw this elsewhere too. IF refineries are not able to produce as much, then they won't use as much oil. RIGHT? So that should be VERY negative for oil, right? YUP! So, whyzzit that oil is up when it oughtta be down? Maybe there's shortages in them thar wells too? AND IF THERE'S WELL PROBLEMS and REFER probs and Pipe line probs, well add it up and tell me it can't be possible embedded problems, huh? I'm thinking some of these embedded boys might just be right after all. It's sure startin to look that way.

OH, one final thought. Sure was nice of all the big POLLY smarta**** to leave before TSHTF, huh? Still, I wish they were around so we could rub their face in some of the same crow they were cramming down everyone's throats. I like to see people take the same medicine that they like to dish out to others.

-- Dick Moody (dickmoody@yahoo.com), January 19, 2000

Answers

Good analysis. I gave my tech analysis of crude in another thread and we're not so far apart. However, I use more "measured moves" target price calculation along with historic support and resistance points than you may. However, I do like the ADX indicator a lot. Thanks for pointing out the numbers on it.

I predicted a $34 resistance level, then $42. If it tops $42, then God knows where it will go. It's mostly emotional trading from that point onward.

Don't short crude oil futures just yet, however, crude put options are REALLY cheap right now and you never know when you can get in the money.

-- I AM (Trying@2B.Reasonable), January 19, 2000.

Dick -- Thanks for your continued posts from the technical analysis side.

Let's not dig up the polly issues again - apart from the trolls, it gives the rest of us a chance to take a look at what's happening without the endless bickering.

I don't need or want to be right about my 8.5 coming down the pike. Would rather eat crow morning, noon and nite.

-- BigDog (BigDog@duffer.com), January 19, 2000.

Dick,

I, too thank you for the posts from the technical side. I can see -- by following the news here and on Downstreamer's forum and subscribing to OPIS -- some of the fundamentals develop, but have never been sufficiently versed in technicals to be able to use them.

Oh, boy, have I paid a price for that lack of knowledge!!!!!

This is interesting because here, in a major market, we can see both technicals and fundamentals giving the same market direction indication. Only, the technicals tell us (or at least they tell you) "how much," as well as "which way."

BTW, sure hope you're right, since my longs consist of Mar. options, 27, 28, and 32. Bought them in October. Would like to see all of them in the money ('specially the 32's!!!!)

Big Dog, do you have good receipes for that crow, just in case?

-- rocky (rknolls@no.spam), January 19, 2000.

Mr. Richard Moody,

'YOU SIR--ARE A GOOD MAN'

-- d.......... (dciinc@aol.com), January 19, 2000.

Thanks Mr Moody for your informative post.....~ and i agree with the last paragraph as well

-- kevin (innxxs@yahoo.com), January 19, 2000.

Would it be fair to say that the oil market (unlike equities) still functions properly on both a technical and fundamantal level? Heaven knows that it deals in something much more real than "Internet solutions" or "B2B".

Oil at $30, or possibly $40? That would certainly throw a spanner into the works...

-- DeeEmBee (macbeth1@pacbell.net), January 19, 2000.